NetApp Dropped from Oaktree Capital’s Portfolio



Oaktree Capital exits NetApp

According to a recent 13F filing by Oaktree Capital, the fund exited its stake in NetApp (NTAP) by selling its entire stake of 490,000 shares of the company.

NetApp is a 0.5% part of the PowerShares Buyback Achievers Portfolio (PKW) and a 0.78% part of the iShares Morningstar Mid-Cap ETF (JKG).

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NetApp company profile

NetApp offers data management and storage systems, software, and services. The company’s “fabric-attached storage (FAS) platform” provides a storage platform catering to cloud environments, shared infrastructures, and business applications. The company is an OEM (original equipment manufacturer) provider of storage, enabling other OEMs to provide storage and IT solutions that serve the market.

Third-quarter fiscal 2015 financial results miss estimates

NetApp reported fiscal 3Q15 revenues of $1.55 billion and EPS (earnings per share) of $0.75. These figures missed analyst forecasts of $1.61 billion and $0.77.

According to a research report by Ananda Baruah and David Ryzhik of Brean Capital, dated February 12, 2015, the top and bottom line misses were driven by greater-than-expected foreign exchange (FX) headwinds as well as consumer buying patterns. Also, more than 40 deals in the pipeline were badly executed. As a result, these deals were either pushed to the next quarter or were lost when customers changed purchase decisions.

NetApp has a DE (debt-to-equity) ratio of 0.4x. This is slightly higher than that of peer EMC (EMC), which has a DE of 0.3x and that of SanDisk (SNDK), which has a DE value of 0.2x. NetApp’s DE is lower than Seagate Technology’s (STX) 1.1x.

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NetApp increases its stock repurchase program

NetApp increased its stock repurchase program by an additional $2.5 billion. It expects to repurchase roughly $206 million of the company’s common stock by the end of May 2015.

NetApp’s expands its product portfolio

NetApp was involved in the acquisition of Riverbed Technology’s (RVBD) SteelStore product line. This product should enable NetApp to offer companies “cloud-integrated storage” to efficiently and securely back up data within both public and private cloud environments.

In the next part of this series, we’ll look at Oaktree Capital’s sale of its stake in EMC (EMC).


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