NetApp Inc. (NASDAQ:NTAP) shares are down significantly today after the company announced the acquisition of Solidfire for $870 million. It’s very surprising to some that the stock has tanked this much since it was generally expected that the acquisition would take place for a much higher amount (around $1.2 billion). NetApp Inc. (NASDAQ:NTAP) apparently spent enough to outbid both Samsung and Cisco for the Flash storage company. But the question is appears to be, “Did they spend too much?”
With a market capital of approximatley $7.5 billion, this is a large acquisition for NetApp Inc. (NASDAQ:NTAP) , one which investors evidently do not like.
The stock is down 7.31% or $2.02 following the news, hitting $25.58 per share. Approximately 41,358 shares traded hands. NTAP shares have declined 21.92% since May 19, 2015 and are currently downtrending. It has underperformed the S&P500 by 19.66%.
From a total of 18 analysts covering Netapp Inc. (NASDAQ:NTAP) stock, 3 rate it a “Buy”, 6 a “Sell”, and 9 a “Hold”. This means that 17% of the ratings are positive. The highest target price is $45 while the lowest target price is $28. The mean of all analyst targets is $34.47 which is 34.75% above today’s ($25.58) stock price. Netapp Inc. was the topic of 25 analyst reports since August 17, 2015 according to the firm StockzIntelligence Inc. JMP Securities initiated shares on December 16 with a “Mkt Underperform” rating. UBS downgraded shares to a”Sell” rating and a $30 target share price in their report from an October 26. Lake Street maintained NTAP stock in a recent report from November 19 with a “Hold” rating. Barclays Capital initiated the rating on October 14. Barclays Capital has a “Underweight” rating and a $31 price target on shares. Finally, Maxim Group maintained the stock with a “Buy” rating in a report they issued on an October 27.
The institutional sentiment decreased to 0.77 in Q2 2015. It’s down 0.12, from 0.89 in 2015Q2. The ratio fall, as 57 funds sold all their NetApp Inc. shares they owned while 167 reduced their positions. 56 funds bought stakes while 117 increased their total positions. Institutions now own 239.76 million shares which is 10.41% less than the previous share count of 267.60 million in 2015Q2.
Okumus Fund Management Ltd. holds 4.36% of its total portfolio in NetApp Inc., equating to 1.13 million shares. Aimz Investment Advisors Llc owns 89,544 shares representing 2.43% of their total US portfolio. Moreover, Seizert Capital Partners Llc has 2.05% of their total portfolio invested in the company, equating to 2.28 million shares. The Texas-based Petrus Trust Company Lta has a total of 1.98% of their portfolio invested in the stock. Fort L.P., a Maryland-based fund reported 128,043 shares owned.
Since May 27, 2015, the stock had 0 insider purchases, and 4 selling transactions for a total of $1.80 million in net activity. Fawcett Matthew K sold 6,633 shares worth $195,608. Shaheen George T sold 35,000 shares worth $1.11M. Allen Jeffry R sold 25,000 shares worth $832,773. Georgens Thomas sold 34,705 shares worth $1.17 million. The insider Noviello Nicholas R sold 4,320 shares worth $146,318.
NetApp, Inc. is engaged in providing software, systems and services to manage and store customer data. The company has a market cap of $7.48 billion. The Firm offers a portfolio of services and products to a range of customer workloads across various data types and deployment models. It has 20 P/E ratio. The Company’s data management solutions enable clients on-premises or in a public cloud resource to control, integrate, move and manage it.