A big hedge fund is also buying Globe Specialty Metals Inc (NASDAQ:GSM)’s stock. Steve Major‘s Corsair Capital recently filed a 13G, disclosing that it owns over 3.69 million shares, up from 1.73 million shares at the end of the first quarter. Corsair’s 3.69 million shares give the hedge fund a 5.01% stake in the company. Corsair Capital joins Clifton Robbins’ Blue Harbour Group and Chuck Royce’s Royce & Associates as major shareholders of the materials company. Blue Harbour Group owns 5.78 million shares, worth over $109 million,and Royce & Associates owns over 2.2 million shares, worth $42 million. Although Blue Harbour kept its position the same during the first quarter, the hedge fund could add if the merger outperforms.
Silicon metals and alloy demand will grow by more than 6% year-over-year in the coming decade as several mega-trends drive growth. Because solar panels use silicon as a primary ingredient, solar demand for silicon will increase. Because car manufacturers are substituting lighter weight aluminum and silicon for steel to make their vehicles lighter, aluminum demand for silicon will increase. Given that natural gas is cheap in the United States, the energy costs to produce silicon metals and alloys will stay low, increasing margins. All of these factors should help Globe Specialty Metals Inc (NASDAQ:GSM) do well in the coming decade. If management executes and the company realizes synergies of $95 million or more, Globe Specialty Metals should trade above $25 a share.
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