Value-Oriented Corsair Capital Comments on Strong Q2, 5 Key Positions

Clearwater Paper Corp (NYSE:CLW)

 – Shares Owned by Corsair Capital Management (as of March 31): 293,363

 – Value of Corsair Capital Management’s Holding (as of March 31): $14.23 Million

Corsair Capital reduced the size of its Clearwater Paper Corp (NYSE:CLW) position by 11% during the March quarter, to 293,363 shares. The reshuffled stake was valued at $14.23 million at the end of the first quarter. The manufacturer of consumer tissue, away-from-home tissue, parent roll tissue, bleached paperboard, and pulp has seen the value of its stock gain 35% in 2016. The company’s second quarter net sales decreased by $7.9 million year-over-year to $436.67 million, reflecting lower average paperboard net selling prices driven by an unfavorable mix shift and a decrease in paperboard shipments due to increased competition in the domestic market. Corsair Capital believes that the recent appointments of John O’Donnell and Alex Toeldte, both activist CEOs, to Clearwater Paper’s Board of Directors will “add more value creators to the CLW team”. Royce & Associates, founded by Chuck Royce, was the equity holder of 194,500 shares of Clearwater Paper Corp (NYSE:CLW) at the end of the March quarter.

IAC/InterActiveCorp (NASDAQ:IAC)

 – Shares Owned by Corsair Capital Management (as of March 31): 535,456

 – Value of Corsair Capital Management’s Holding (as of March 31): $25.21 Million

Corsair Capital Management L.P. owned 535,456 shares of IAC/InterActiveCorp (NASDAQ:IAC) at the end of the first quarter, 100,557 shares more than it did at the end of the final quarter of 2015. The upped position was worth $25.21 million, and constituted 3.5% of the value of the asset manager’s equity portfolio. The media and internet company operates a portfolio of well-known brands and products such as HomeAdvisor, Vimeo, About.com, Dictionary.com, The Daily Beast, Investopedia, and Match Group’s online dating portfolio. For HomeAdvisor alone, the company’s management team recently outlined a path to growing revenue from $355 million in 2015 to over $1 billion in 2020. IAC’S CEO Joey Levin recently released a detailed letter to shareholders to lessen skepticism concerning HomeAdvisor’s long-term potential, a letter viewed as “extraordinary” by Corsair Capital. Moreover, IAC repurchased roughly 6% of its outstanding shares on the open market in the first quarter, a move which, along with the aforementioned letter, was considered by Corsair Capital as a “significant inflection point for the company”. IAC shares are 15% in the green year-to-date. Christian Leone’s Luxor Capital Group owned 3.03 million shares of IAC/InterActiveCorp (NASDAQ:IAC) at the end of the first quarter.

Voya Financial Inc. (NYSE:VOYA)

 – Shares Owned by Corsair Capital Management (as of March 31): 1.06 Million

 – Value of Corsair Capital Management’s Holding (as of March 31): $31.44 Million

Voya Financial Inc. (NYSE:VOYA) was the fifth-largest position in Corsair Capital Management’s pool of holdings at the end of the first quarter after the New York-based asset manager cut its Voya stake by 3% during the quarter to 1.06 million shares valued at $31.44 million. The retirement, investment and insurance company, which serves as a custodian for various retirement and 401(k) programs among other things, has been weighed down by the continued low interest rate environment, what with it being difficult for Voya Financial to manufacture products that are attractive to customers and profitable at the same time. Corsair Capital believes “the current rate environment represents a manageable headwind that will not require an infusion of capital, just less excess capital available to return to shareholders”. Moreover, the value-oriented investment firm thinks “VOYA will actively repurchase shares of the company at these levels, creating even further value in the long-term”. Adam Usdan’s Trellus Management Company acquired a new stake of 42,600 shares of Voya Financial Inc. (NYSE:VOYA) during the June quarter.

Disclosure: None