Verisign, Inc. (NASDAQ:VRSN) got a vote of confidence from billionaire investing legend Warren Buffett over the weekend. An SEC filing released on Saturday reports that Warren Buffett, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) and holding companies control 12,985,000 shares of common stock of Internet security firm Verisign as of June 30th. This represents a 10.4% stake in the company.
Versign, Inc. (NASDAQ:VRSN) shares are down more than 10% year to date, and have dropped even more precipitously from the $62.96 52 week high reached in late January. The stock is up over $1.50 on Monday, trading at just under $55.
This year has been a record-breaking year for initial public offerings with companies going public via SPAC mergers, direct listings and standard IPOS. At Techlive this week, Jack Cassel of Nasdaq and A.J. Murphy of Standard Industries joined Willem Marx of The Wall Street Journal and Barron's Group to talk about companies and trends in Read More
According to Thomson Reuters, the consensus analyst price target for Verisign stands at $56.00.
Berkshire accumulating Verisign
As a number of analysts have pointed out, Buffett and Berkshire have been steadily accumulating Verisign shares since early last year. Furthermore, Berkshire added 11.12% to their position this quarter, increasing their stake in Verisign, Inc. (NASDAQ:VRSN) from 11,685,654 in March. Buffett’s conglomerate only owned 8.174 million shares in March of 2013, meaning they have increased their position by more than 50% over the last 15 months.
More on Verisign
Verisign, Inc. (NASDAQ:VRSN) business model involves providing companies with reliable and secure domain names. The firm currently has a market cap of more than $6.8 billion.
The stock soared back in mid July when the company reported strong second quarter results. Verisign earned revenues of more than $250 million for the period, a solid 4.6% year-over-year increase. Net income topped $100 million for the first time, relative to just $87 million a year ago.
The firm closed the second quarter with $1.5 billion in cash, down by $178 million from year-end 2013. Verisign also announced a share repurchase authorization of $491 million in late July, increasing its existing total share buy back authorization to $1 billion with no expiration date.
Last but not least, Verisign, Inc. (NASDAQ:VRSN) sports a P/E of 14, approaching a five-year low. The company’s P/S ratio of 7.99 is also very close to a one-year low.