This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Carl Icahn Boosts Nuance Holdings, Should You Follow this Famous Investor?

Chris Lau, Kapitall: Nuance and Apple are popular tech stocks for Carl Icahn. But should you follow his lead?

Carl Icahn boosted his holding in Nuance Communications ( NUAN ) between December 6 – 10, adding to his already sizeable stake in the voice command tech stock. Overall, shares in Nuance are down 36% in 2013, but recently bounced from a bottom.

[Read more from Kapitall: Mexico Liberalizes Oil Fields: How Energy Stocks Could React]

Profits at Nuance in the last year are not steady, due to rising costs and higher R&D expenses. With Carl Icahn now holding 19.2% in the stock, should investors be expecting him to shake up the company in the weeks ahead?

Icahn bought an additional 1.38 million shares, and he now holds nearly one-fifth in the company. The large position stirred rumors that the activist could push Apple (AAPL) to buy out Nuance. But this rumor does not sound likely to play out: Nuance has a market capitalization of $4.43 billion, while Apple likes to make small acquisitions.

Click on the interactive chart to see NUAN and APPL stock prices over time.

Very recently, for example, Apple bought PrimeSense for $350 million. PrimeSense develops chips that give machines the capability to observe a scene in three dimensions. Competitor Microsoft (MSFT) is a license holder of the technology.

Risks of following Carl Icahn

Nuance has about $1.2 billion in convertible debt. And new entrants are joining the voice recognition market, making it more critical for Nuance to expand rapidly into more markets. Anyone using Google (GOOG) Voice will notice how strong the service is.

In the enterprise market, Nuance recognizes the value of voice dictation in the medical field. Nuance is making it easier to transcribe voice dictation for electronic medical records.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs