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Top Buys of Third Point That You Shouldn't Miss

Sunday - 6/16/2013, 1:19pm  ET

Third Point's holdings are worth $5.3 billion. Daniel Loeb, fund manager of Third Point, focuses on publicly traded stocks, expansion plans of companies, and forex opportunities.

According to the recent 13F filings, its top new buys were B/E Aerospace , Tiffany , and Virgin Media. Virgin media was recently acquired by Liberty Global

High demand for modular lavatory systems

Last year, B/E Aerospace signed a contract of $800 million with Boeing to provide a modular lavatory system from the first quarter of 2013. The lavatory system is integrated with B/E Aerospace's LED lights, a vacuum toilet, and a damage-proof lavatory oxygen system. According to the deal, B/E Aerospace will provide a modular lavatory system for Boeing's 737 Next-Generation and 737 MAX aircrafts.

Boeing is planning to upgrade its 737 fleet with various products of B/E Aerospace. It will also offer similar lavatory systems for the Airbus A320 in the third quarter of 2013. Considering the increasing demand for its lavatory system, B/E Aerospace expects total revenue to increase from $3.46 billion in the first quarter of 2013 to $3.89 billion by the fourth quarter of 2013.

B/E Aerospace is the world's leading producer of excellent aircraft cabin interiors. There is currently an increase in demand for its 'Super First Class' interiors, specially designed for the business class. Emirates Airlines, Delta, Qatar Airways, and Lufthansa are some of its main clients.

The business jet segment of B/E Aerospace reported an increase in revenue from $85.5 million in the fourth quarter of 2012 to $95.5 million in the first quarter of 2013. In the first quarter of 2013, B/E Aerospace sold 'Super First Class' suites worth $250,000 each to its major clients The revenue from the business jet segment is expected to increase from $96 million in the first quarter of 2013 to $106 million by end of 2013.

Super-fast broadband speed contributes to revenue 

On June 10, 2013, Liberty Global acquired a 100% stake in Virgin Media -- Britain's top cable and broadband service provider, for $24 billion. According to the deal, Virgin Media and Liberty Global will have around 25 million subscribers.

The acquired company increased its broadband speed to 120 Mbps from 60 Mbps in February 2013 to attract new subscribers. This is the U.K.'s super-fast broadband. Around 9,000 new subscribers were reported in the first quarter of 2013. Also, Virgin Media reported revenue of $968 million from its broadband segment. At present, there are around 2.17 million subscribers of its super-fast broadband packages. These subscriptions are expected to increase to 2.98 million by the end of the fourth quarter. Revenue from the broadband segment is expected to increase to $1 billion by the end of 2013.

Virgin Media signed a contract with Sky’s broadband, BskyB, to share its cable network for broadband service. To connect Sky's separate nationwide broadband network, Virgin Media's cable system having high-capacity service will be used. This will help Sky to meet its customer demand for high-speed up to 10 Gbps. This is a five year deal worth $65.36 million. The total revenue of Virgin Media is expected to increase from $13.87 billion in 2012 to $22.4 billion this year.

First diamond store in Russia

In April 2013, silver price decreased to $26.80 per ounce. To take the advantage of the falling prices, Tiffany has introduced new range of silver jewelry. It will be priced at $500 or below. Tiffany has come up with the idea of the '$500 and below' range of jewelry to attract young, middle, and upper middle class customers. This is the best range for customers who hesitate to spend a large amount on jewelry. It is expected that 25% revenue will be generated from silver jewelry. Total revenue is expected to increase from $855 million reported in the first quarter of 2013 to $904.4 million by the end of 2013.

Tiffany announced a new launch of its first diamond store in Moscow recently. It will open in the first quarter of 2014. Tiffany will sell its diamond rings, pink and yellow jewelry, and designer jewelry. The store is located in Moscow's luxurious shopping wonderland, Red Square. There are ample growth opportunities for Tiffany to generate revenue from Moscow, as the online sales of diamond jewelry are higher in Moscow. With the launch of this store, total revenue expected for the year 2014 is $1.3 billion.


Tiffany, with its new store in Moscow, will attract many high-class customers, and new silver jewelry range. This will help the company generate higher revenue.

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