Groupon Inc shares were up Wednesday following comments from Leon Cooperman, the chief executive of hedge fund Omega Advisors, who believes that the company’s shares are worth 50% more than their current price.
Groupon stock mispriced
In an interview with CNBC, Cooperman told, “we think the underlying asset value of [Groupon] is substantially is in excess of where the stock is trading […] The stock seems mis-priced. We think it’s worth 40-50 percent more than it’s [currently] trading.” The hedge fund chief believes that the company is successfully turning around.
According to a regulatory filing in November, in the third-quarter, Cooperman’s Omega hedge fund acquired 8.8 million shares in Groupon
Comments from Cooperman echoed a similar thoughts made recently by Brean Capital. In a note earlier this month, Brean Capital analyst Tom Forte turned more bullish on the company following the company’s strong holiday sales.
Forte noted that in the past despite reporting upside in revenues, Groupon faced “significant” margin pressures, but that would not be the case this time as strong sales would help the company post a decent margin. Brean Capital has assigned Buy rating on the company with a price target of $10.
Analysts ratings on Groupon
A number of analysts have recently provided opinions on Groupon. In a research note on December 1st, Bank of America upgraded the stock from Neutral to Buy, and also raised the price target from $8 to $9.50. Analysts at Barrington Research reiterated an Outperform rating on the company and slashed the price target from $9 to $8 in a research note on November 17th. Goldman Sachs assigned a Neutral rating to the company and increased the price target on the stock to $8.00 in a research note on November 12th. Groupon currently has a consensus rating of Hold and an average price target of $8.60.
Groupon saw a significant decline in short interest for the month of November. Short interest for the company as on November 28th totaled 89,267,776 shares, which is a drop of 4.6% from the November 14th total of 93,562,046 shares. Around 20% of the company’s shares are sold short.
In separate news, CEO Eric P. Lefkofsky sold 454,166 shares of the company’s stock in an open market transaction on December 15th. Lefkofsky sold the shares at an average price of $7.18, for a total transaction value of $3,260,911.88.