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Clarus Corp (CLAR) Doing Well But Market Slow to Appreciate Positive Changes: Maran Capital

Maran Capital, a value-driven investment management firm led by Dan Roller, is bullish on Clarus Corp (NASDAQ:CLAR). The company is engaged in designing and manufacturing of active outdoor performance equipment and apparel for climbing, mountaineering, backpacking, skiing and other outdoor recreation activities. In this article, we’re going to take a look at Maran Capital’s comments about Clarus that the investment firm made in its Q1 Investor Letter.

Here’s what Capital Founder and Chief Investment Officer Dan Roller said about the company:

The underlying business performance at Clarus continues to exceed my expectations. Sales in the fourth quarter grew 11% y/y at Black Diamond Equipment (Clarus’ core business), an acceleration from the high single digit growth rates of the prior two quarters. Momentum is strong entering 2018, driven by secular tailwinds in their core markets, new product innovation, and growing support for our products by key retail customers.

I performed additional due diligence one the company during the quarter, including meeting with a number of top executives at the Outdoor Retailer trade show. I continue to believe that the market has been slow to appreciate the positive change that the new president, John Walbrecht (now on the job for around 18 months), has driven. Eventually, investors should take notice.

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For the first quarter of 2018, Clarus Corp (NASDAQ:CLAR) reported sales of $53.3, up compared to $41.56 million in the same year-ago quarter. Net income improved to $0.4 million, or $0.01 per share, versus a net loss of $1.5 million, or $0.05 per share. Adjusted net income before non-cash items rose 635% to $3.8 million, or $0.13 per share, versus $0.5 million, or $0.02 per share, last year. Adjusted EBITDA improved 590% to $4.3 million, versus $0.6 million.

CLAR closed at $7.35 on Wednesday. Its opening price on the last trading day was $7.45. The stock gained 13.95% over the past 12 months, while its year-to-date performance fell 5.16%. Whereas, over the past six months, the share price plummeted 3.92%. CLAR has a consensus average recommendation of ‘Overweight’ and a consensus average target price of $9.13, according to analysts polled by FactSet.

Meanwhile, Clarus Corp (NASDAQ:CLAR) isn’t popular stock among hedge funds covered by Insider Monkey. As of the end of 2017, there were only nine funds in our database with positions in the company.