Jay Petschek’s Corsair Capital Management Buying Up The Globe; Or At Least, Globe Specialty Metals Inc. (GSM)

According to a recent SC 13G form filed with the Securities and Exchange Commission, Corsair Capital Management collectively owns 4.01 million shares of Globe Specialty Metals Inc. (NASDAQ:GSM), which represent 5.44% of the company’s outstanding shares. The hedge fund, co-managed by Jay Petschek and Steven Major increased its position in the producer of silicon metal and silicon-based alloys by 2.27 million shares since the last 13F filing for the reporting period of March 31.

 Jay Petschek - Corsair Capital

We don’t just track the latest moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 142%, nearly 2.5 times greater returns than the S&P 500 during the same period (see more details).

Jay Petschek And Steven Major
Jay Petschek And Steven Major
Corsair Capital Management

Corsair Capital Management is a New York-based hedge fund co-founded by its current portfolio managers, Jay Petschek and Steve Major, in 1991. This investment firm is a value-oriented, event-driven, long/short hedge fund that primarily focuses its strategy on small to mid-cap North American companies. Corsair Capital Management’s flagship fund, Corsair Capital Partners L.P., has delivered attractive returns since its inception, generating an annualized net return of 14%. Moreover, the two hedge fund managers are known for keeping a close eye on companies that are undergoing restructuring and on other distressed companies, in expectations of high future gains. Therefore, Corsair Capital Management’s actions on the market might signal great buying opportunities. In this article we will also take a look at three other top picks of this hedge fund including: Republic Airways Holdings Inc. (NASDAQ:RJET), Orbital ATK Inc. (NYSE:OA) and Voya Financial Inc. (NYSE:VOYA).

But first, back to Globe Specialty Metals Inc. (NASDAQ:GSM), which is one of the world’s largest producers of silicon metal and silicon-based specialty alloys. The stock price of the company has increased by slightly more than 12% since the beginning of the current year and there are no signs that the company is facing any major troubles along its way. At the end of February, Globe Specialty Metals agreed to combine with another leading producer of silicon metal and silicon alloys, Grupo FerroAtlántica, which created the world’s leading silicon and specialty metals producer. Nevertheless, it might take quite some time until the projected synergies, including the cost synergies of $65 million annually and some extra $30 million of synergies from refinancing its existing debt, will be fully realized. So, the company is likely to deliver very strong financial performance in the upcoming years as it becomes the leader in silicon metal production.

In the meantime, Globe Specialty Metals also managed to deliver satisfactory financial performance during its fiscal third quarter of 2015. The company reported an adjusted net income of $15.1 million, which denotes a 46% increase year-over-year. On the other hand, the sales figures for the most recent quarter amounted to $194.7 million, down 0.7% year-over-year. However, the company appears to be in good financial health, as its Board of Directors announced a quarterly dividend of $0.08 per share that will be paid on June 24, 2015, providing a yield of 1.65%. The largest shareholders in Globe Specialty Metals Inc. (NASDAQ:GSM) from the pool of investment firms we track are Clifton S. Robbins’ Blue Harbour Group, which own 5.78 million shares valued at $109.38 million, and Chuck Royce’s Royce & Associates, which owns a relatively smaller stake of 2.25 million shares worth $42.52 million

Let’s now take a quick look at the other three hot picks of Corsair Capital Management. According to another recent 13G form filed with the SEC, Jay Petschek and Steve Major’s hedge fund collectively owns 4.78 million shares in Republic Airways Holdings Inc. (NASDAQ:RJET), which represent 9.6% of the company’s outstanding common stock. The hedge fund’s position increased by 126,189 shares since the most recent 13F filing. Republic Airways’ shares declined by nearly 30% year-to-date, therefore, the stock might serve as a good buying opportunity for bottom-fishing investors. The company has recently posted its preliminary passenger traffic results for May and it seems that the company is making progress. Republic Airways Holdings reported carrying more than 2 million passengers during May, marking an increase of 1% year-over-year. The largest investor in Republic Airways Holdings Inc. (NASDAQ:RJET) in our database is Ross Margolies’ Stelliam Investment Management, which own 4.75 million shares valued at $65.35 million.

Corsair Capital Management has initiated a long position in Orbital ATK Inc. (NYSE:OA), with the hedge fund reporting a new equity stake consisting of 779,505 shares valued at $59.73 million. The stock is up almost 4% over the past three months and might embark on an uptrend soon, as the company has grabbed a $27 million contract from the U.S. Army for the production of a specific type of proximity sensor. Orbital ATK Inc. (NYSE:OA) is the sole supplier of the required type of sensor, therefore, the company will undoubtedly achieve substantial financial gain from the U.S. Army order.

The last stock we’ll cover in this article is Voya Financial Inc. (NYSE:VOYA). Corsair Capital Management reported the sale of 43,700 shares in Voya, which represents only 3% of the hedge fund’s stake reported in the previous 13F filing. Jay Petschek and Steve Major’s hedge fund now owns 1.28 million shares as of the end of the most recent quarter, which are valued at $55.33 million. The stock has increased by nearly 11% since the beginning of the current year and the company’s outlook still remains quite strong. Voya Financial has been recently included in the 2015 Fortune 500 list, which consists of the largest American companies by revenue. The company is ranked second among the new entrants to the Fortune 500, which clearly indicates that Voya Financial has been performing very strong lately. Another reputable hedge fund from our database that owns a stake in Voya Financial Inc. (NYSE:VOYA) is Rob Citrone’s Discovery Capital Management.

Disclosure: None