Corsair Capital's Q1 Letter & Pitch on Orbital ATK ~ market folly

Friday, April 24, 2015

Corsair Capital's Q1 Letter & Pitch on Orbital ATK

Jay Petschek and Steven Major's hedge fund firm Corsair Capital is out with its first quarter letter to investors.  In it, they talk about the global macro situation as well as their positions in Ryman Hospitality (RHP), Kindred Healthcare (KND), CommScope (COMM), and Republic Airways (RJET).

Sees IAC Interactive Spin-Off Coming

Additionally, they outline their thoughts on IAC Interactive (IACI).  They feel shares are worth over $100 (currently trading around ~ $72) and see revenue growth via their online dating apps (advertising implementation on Tinder and paid subs on Tinder Plus).  Corsair expects chairman Barry Diller to spin-off the online dating segment (Match Group) in order to unlock value.

Pitch on Orbital ATK

The end of their letter includes a pitch on Orbital ATK (OA).  In summary, Orbital merged with Alliant Techsystems and they see various synergies here.  This, plus increased buybacks and dividends lead them to believe multiple expansion will occur, bringing the company more inline with competitors.  They think shares are worth ~$100 and currently trade around $73. See the letter below for the full pitch.

Corsair's Q1 Letter

Embedded below is Corsair Capital's Q1 2015 letter:

For more from this hedge fund, head to Corsair Capital's recent interview with Graham & Doddsville.

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