Maran Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In the fourth quarter of 2021, Maran Partners Fund returned +3.3%%, net of all fees and expenses, and in the full year 2021, the fund returned +53.2% net Over the past five years, the fund has compounded at the annualized rate of +22.2%, net of all fees and expenses. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Maran Capital Partners, in its Q4 2021 investor letter, mentioned Cadre Holdings, Inc. (NYSE: CDRE) and discussed its stance on the firm. Cadre Holdings, Inc. is a Jacksonville, Florida-based holding company with a $762.6 million market capitalization. CDRE delivered a -13.49% return since the beginning of the year and it closed at $22.18 per share on February 2, 2022.
Here is what Maran Capital Partners has to say about Cadre Holdings, Inc. in its Q4 2021 investor letter:
“As you know, we have been invested in Clarus Corp for over five years, and it has been a tremendous performer for our partnership. I have a lot of respect for Clarus’ Executive Chairman, Warren Kanders. He has done a great job building the company organically as well as by making good acquisitions. Prior to Clarus, Kanders built Armor Holdings from a small, sleepy bulletproof vest manufacturer into a global defense conglomerate. In 1996, he took control of what was then called American Body Armor, which had book value of five million dollars and was generating $11 million in sales. It generated approximately half a million dollars of earnings that year. This was a very small business – subscale, an improbable company to be public at all.
Yet Kanders had a vision that the company could grow to be much larger. In his initial Form 13-D filed in January 1996, he described his buy-and-build strategy: “…continue to grow its existing business base and actively pursue industry consolidation through corporate acquisitions.”
Over the subsequent 11 years (including the dot-com bust of 2000), the business grew, organically and through acquisitions, to have sales of almost $2.5 billion and net income of over $100 million. The stock price increased from $0.75/sh to $88/sh upon its sale to the British defense contractor, BAE Systems. Any 100-bagger in investing is remarkable, but to create a 100-bagger in 12 years is something else entirely.
After selling Armor Holdings in 2007, Kanders began building Clarus – a cash and NOL shell – into what it is today. I think you are all familiar with that story.
But behind the scenes, Kanders had the opportunity to reacquire a small piece of the Armor Holdings portfolio. In 2012, Kanders privately purchased the original core of Armor Holdings, called Safariland – a collection of law enforcement accessory businesses focused on bulletproof vests and duty gear (holsters, etc). In 2012, Safariland was generating EBITDA of approximately eight million dollars. Since then, Using Kanders’ prototypical buy-and-build playbook, Safariland has grown EBITDA from that initial eight million dollar in 2012 to what should be north of $70 million this year, a 27% CAGR. It is this business, renamed Cadre Holdings, that Kanders brought public earlier last quarter and that we invested in.
Cadre has a strong market position, great brands, a strong team and culture, and a few free hidden options…” (Click here to see the full text)
Our calculations show that Cadre Holdings, Inc. (NYSE: CDRE) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Cadre Holdings, Inc. (NYSE: CDRE) delivered a 43.82% return in the past 3 months.
You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.