Shares in Zoran Corp. (Nasdaq: ZRAN), a developer of processors for digital imaging consumer products, are not among the darlings of American investors, at least right now. The company's poor business results and pessimistic guidance for the fourth quarter sent the share tumbling 38% so far this year.
Zoran's share price fell 3.7% yesterday to $6.82, giving a market cap of $338 million In the eyes of at least one institutional investor, the current share price is a buying opportunity. In a filing with the US Securities and Exchange Commission (SEC), Zoran states that Ramius LLC, a hedge fund owned by Cowan Group Inc. (Nasdaq: COWN), has reached a 6% holding in the company, becoming its second largest shareholders, after BlackRock Institutional Trust Company NA, which owns 10.8%.
Ramius bought 2.98 million Zoran shares at $6.46 per share for a total of $19.3 million. Zoran's share price sank to a low point of $6.18 last Monday, before recovering later in the week. Ramius presumably bought the shares last Monday or on Tuesday.
Ramius says that it believes that Zoran's share is traded at a discount, which makes it a buying opportunity. Ramius also says that it does not rule out meeting with Zoran's management in order to influence the company's strategy and how it does business. In other words, Ramius could become an activist institutional investor if it is displeased by the return it gets from the investment in Zoran.
Published by Globes [online], Israel business news - www.globes-online.com - on November 2, 2010
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