Analyzing Informatica’s Leveraged Buyout Deal
Application Software Subsector Stocks Outperform SKYY in 2015
Overview
In this series, we’ll analyze the performance of the stocks in the First Trust ISE Cloud Computing Index Fund ETF (SKYY) that are a part of the Application Software subsector.
Since January 2015, SKYY generated returns of 4.47%. It closed at $28.71 on Friday, August 21, 2015.
Subsector performance
In the above chart, you can see that the Technology, Hardware, and Storage subsector generated returns of -14.93%. Also, the IT Consulting and Communications Equipment subsector generated returns of -7.42% and -2.68%, respectively.
The subsectors that have outperformed SKYY include Home Entertainment Software, Specialized REITs, and Internet Retail with returns of 21.92%, 25.44%, and 112.05%, respectively.
The Application Software subsector generated returns of 10.95% with Informatica (INFA), Salesforce (CRM), and Adobe (ADBE) generating YTD (year-to-date) returns of 27.78%, 23.79%, and 18.46%, respectively.
Netflix (NFLX) has generated YTD returns of 152.84%. Amazon has generated returns of 71.26%, respectively. In comparison, Teradata (TDC), Rackspace (RAX), and Brightcove (BCOV) generated negative returns of 30.11%, 36.15, and 28.92%, respectively, since January 2015.
Leveraged buyout
In April 2015, it was announced that Informatica agreed to be bought by Canada Pension Plan Investment Board and Permira Advisors for $5.3 billion. Currently, this is the largest buyout deal in 2015. The above mentioned private equity investors will pay $48.75 per share, according to a report from the Wall Street Journal.
You can get diversified exposure to Informatica by investing in SKYY. It holds 3.51% of the stock.
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