In this article, we discuss the top 10 stock picks of Travis Cocke’s Voss Capital.
Travis Cocke founded Voss Capital, a Texas-based private investment firm, in 2011. Travis Cocke currently serves as the chief investment officer at the hedge fund, managing a 13F portfolio worth $243.5 million at the close of the third quarter of 2021.
A graduate in business administration and finance from Texas A&M University, Travis Cocke started his finance career in 2009 by joining Ascendant Advisors as a business development analyst, and left a year later to start his own hedge fund.
Voss Capital is a fundamentally research-driven and value oriented long/short equity fund focused on underfollowed securities. Travis Cocke is a value investor that manages discretionary assets under management of $191.4 million at Voss Capital. His investments as per the 13F filings from the third quarter of 2021 are focused primarily on the real estate, materials, information technology, industrials, finance, and consumer discretionary sectors, with a top ten holdings concentration of 65.13%.
In the third quarter of 2021, Travis Cocke invested in 8 new securities via Voss Capital, made additional purchases in 8 companies, discarded 15 stocks, and reduced his stake in 17 previously owned equities. The most notable stocks in Voss Capital’s Q3 portfolio are Builders FirstSource, Inc. (NYSE:BLDR), Blackstone Inc. (NYSE:BX), and Mr. Cooper Group Inc. (NASDAQ:COOP).
Our Methodology
We used the third quarter portfolio of Travis Cocke’s Voss Capital to select the hedge fund’s top 10 holdings. The securities are ranked according to Voss Capital’s stake value in each holding.
Top 10 Stock Picks of Travis Cocke’s Voss Capital
10. Louisiana-Pacific Corporation (NYSE:LPX)
Voss Capital’s Stake Value: $8,554,000
Percentage of Voss Capital’s 13F Portfolio: 3.51%
Number of Hedge Fund Holders: 36
Louisiana-Pacific Corporation (NYSE:LPX) is an American provider of building materials that primarily manufactures engineered wood products. Based in Nashville, Tennessee, Louisiana-Pacific Corporation (NYSE:LPX) supplies its products to builders, homeowners, distributors, dealers, and retail home centers.
Travis Cocke purchased a stake in Louisiana-Pacific Corporation (NYSE:LPX) in Q3 2020, buying 210,000 shares of the company, worth $6.1 million. Over time, he gradually reduced the number of shares held in Louisiana-Pacific Corporation (NYSE:LPX), and as of Q3 2021, Voss Capital owns 139,375 shares worth $8.5 million. Cocke’s Louisiana-Pacific Corporation (NYSE:LPX) stake represents 3.51% of his total Q3 investments.
On January 21, Goldman Sachs analyst Susan Maklari upgraded Louisiana-Pacific Corporation (NYSE:LPX) to Neutral from Sell with a price target of $84, up from $59. The supply/demand backdrop suggests limited downside in wood products stocks over the coming quarters as volumes remain elevated and pricing power persists, the analyst told investors in a research note. Louisiana-Pacific Corporation (NYSE:LPX) should see additional siding capacity, which will support its growth and expand market share but much of the potential upside to results is already captured in the stock’s valuation, the analyst observed.
In Q3 2021, 36 hedge funds tracked by Insider Monkey were bullish on Louisiana-Pacific Corporation (NYSE:LPX), with stakes equaling $670.5 million, as compared to 39 funds in the preceding quarter, holding stakes worth $852 million in Louisiana-Pacific Corporation (NYSE:LPX).
Kerr Neilson’s Platinum Asset Management held the biggest stake in Louisiana-Pacific Corporation (NYSE:LPX) during the third quarter of 2021, with 1.35 million shares amounting to $83.4 million.
Here is what L1 Capital has to say about Louisiana-Pacific Corporation (NYSE:LPX) in its Q3 2021 investor letter:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Louisiana-Pacific Corporation. We expect the company to deliver strong earnings and cash flow over coming years, and the company remains undervalued at its current share price.”
9. Cornerstone Building Brands, Inc. (NYSE:CNR)
Voss Capital’s Stake Value: $9,496,000
Percentage of Voss Capital’s 13F Portfolio: 3.89%
Number of Hedge Fund Holders: 22
Cornerstone Building Brands, Inc. (NYSE:CNR) is a company supplying external building products for the commercial, residential, repair, and remodel markets based in the United States, Canada, Mexico, and internationally. The three business segments at Cornerstone Building Brands, Inc. (NYSE:CNR) are Windows, Siding, and Commercial. In the third quarter of 2021, Cornerstone Building Brands, Inc. (NYSE:CNR) beat market consensus estimates for GAAP EPS and revenue.
Travis Cocke’s Voss Capital owns 650,000 shares of Cornerstone Building Brands, Inc. (NYSE:CNR) as of Q3 2021, worth $9.4 million, representing 3.89% of the fund’s portfolio.
Morgan Stanley analyst Ravi Shanker on January 26 raised the price target on Cornerstone Building Brands, Inc. (NYSE:CNR) to C$158 from C$150 while maintaining an Equal Weight rating on the stock.
In the third quarter of 2021, 22 hedge funds in the database of Insider Monkey were long Cornerstone Building Brands, Inc. (NYSE:CNR), with stakes totaling $104.8 million. Guardian Point Capital is the largest stakeholder of the company as of Q3 2021, with 2 million shares worth $29.2 million.
Here is what Blue Tower Asset Management has to say about Cornerstone Building Brands, Inc. (NYSE:CNR) in its Q4 2021 investor letter:
“Our biggest portfolio position, Cornerstone Building Brands, has navigated the current environment admirably. While they have been victims of the same supply chain problems and labor shortages plaguing most major manufacturers, they have managed to pass on price increases to their customers and keep manufacturing production at record levels for the company. Their considerable investments in automation in previous years have proven prescient as they can now produce far more products per worker than before and with less reliance on workers in a time of labor shortages. The aggregate sales revenues for the company in the first 9 months of 2021 increased 21.6% over 2020 figures driven by a volume increase of 7.9% and price increase of 13.6%. The official CPI inflation for September 2021 year-over-year was 5.4%, quite a difference from the 13.6% price increase experienced by Cornerstone customers.
Cornerstone has centralized pricing decisions for their subsidiary companies in order to better stay abreast of production input prices (especially steel price increases) and be able to increase prices ahead of inflation. The order backlog for Cornerstone remains at extremely high levels and we expect them to maintain high production volumes and sales for the foreseeable future.”
8. Legacy Housing Corporation (NASDAQ:LEGH)
Voss Capital’s Stake Value: $9,822,000
Percentage of Voss Capital’s 13F Portfolio: 4.03%
Number of Hedge Fund Holders: 9
Legacy Housing Corporation (NASDAQ:LEGH) is a Texas-based company that builds manufactured homes, tiny houses, and mobile home parks primarily in the southern United States. Legacy Housing Corporation (NASDAQ:LEGH) exceeded market consensus estimates for earnings and revenue in Q3 2021.
Voss Capital purchased a stake in Legacy Housing Corporation (NASDAQ:LEGH) in the fourth quarter of 2019, buying 305,549 shares valued at roughly $5 million. By Q3 2021, the hedge fund held 546,531 shares of Legacy Housing Corporation (NASDAQ:LEGH), worth $9.8 million, representing 4.03% of the total portfolio investments.
According to Insider Monkey’s third quarter database, 9 hedge funds were bullish on Legacy Housing Corporation (NASDAQ:LEGH), with stakes totaling $28 million, up from 7 funds in the prior quarter, holding stakes worth $23.1 million in Legacy Housing Corporation (NASDAQ:LEGH). Royce & Associates is one of the leading stakeholders of the company, holding 512,400 shares, amounting to $9.20 million.
In addition to Builders FirstSource, Inc. (NYSE:BLDR), Blackstone Inc. (NYSE:BX), and Mr. Cooper Group Inc. (NASDAQ:COOP), Legacy Housing Corporation (NASDAQ:LEGH) is a notable stock from Travis Cocke’s Voss Capital portfolio.
7. American Outdoor Brands, Inc. (NASDAQ:AOUT)
Voss Capital’s Stake Value: $11,543,000
Percentage of Voss Capital’s 13F Portfolio: 4.73%
Number of Hedge Fund Holders: 13
Headquartered in Missouri, American Outdoor Brands, Inc. (NASDAQ:AOUT) supplies outdoor products and accessories for outdoor and adventure enthusiasts in the United States and internationally. American Outdoor Brands, Inc. (NASDAQ:AOUT) caters to customers searching for hunting, fishing, camping, shooting, personal security, and defense products.
Travis Cocke purchased a stake in American Outdoor Brands, Inc. (NASDAQ:AOUT) in Q1 2021, and has reduced the number of shares owned over the next quarters. As of the close of the third quarter of 2021, Cocke owns 470,000 American Outdoor Brands, Inc. (NASDAQ:AOUT) shares, worth $11.5 million, representing 4.73% of his total Q3 securities.
According to the third quarter database of Insider Monkey, 13 hedge funds were long American Outdoor Brands, Inc. (NASDAQ:AOUT), down from 16 funds in the preceding quarter. Renaissance Technologies is a prominent stakeholder of American Outdoor Brands, Inc. (NASDAQ:AOUT) as of Q3 2021, owning 291,268 shares worth $7.1 million.
On December 13, American Outdoor Brands, Inc. (NASDAQ:AOUT) traded 8.1% higher after news broke that the CEO, CFO, and a few other insiders purchased 16,718 shares of the company’s common stock, worth approximately $310,000. The shares were purchased at $18.32 – $18.95 in a series of transactions.
Here is what Maran Capital Management has to say about American Outdoor Brands, Inc. (NASDAQ:AOUT) in its Q3 2021 investor letter:
“American Outdoor Brands has continued to execute and demonstrate operational savvy. Its direct-to consumer (DTC) reach is best-in-class, and it has managed the recent supply chain backdrop well. The company has built brands and grown brands.
Despite impressive operating performance, AOUT remains a “show-me” story in the eyes of investors on the capital allocation front. I’m pleased that the company has been patient and has not overpaid for acquisitions, but I believe the opportunity exists to create significant value via capital allocation.
With $4/sh of net cash and a decent chance of generating another $2/sh of cash over the next year (against a $22 stock price), AOUT may want to consider taking a page out of the Clarus playbook. (Recall, Clarus repurchased 10% of its shares outstanding at an average price of $4.40 per share in 2015 and 2016 when it was out of favor with investors.) AOUT could repurchase up to 10% of its shares now, and after gaining recognition from the market for being strong stewards of capital, would always have the option of using their shares as currency for future M&A.
Partly because of the uncertainty regarding AOUT’s capital allocation philosophy and strategy, the stock trades at around 5x EBITDA, far below my estimate of intrinsic value. The company can both take advantage of its depressed valuation and eliminate the capital allocation uncertainty in one fell swoop. The value-creation potential is tremendous.”
6. BlueLinx Holdings Inc. (NYSE:BXC)
Voss Capital’s Stake Value: $13,448,000
Percentage of Voss Capital’s 13F Portfolio: 5.52%
Number of Hedge Fund Holders: 14
Headquartered in Marietta, Georgia, BlueLinx Holdings Inc. (NYSE:BXC) distributes residential and commercial building products in the United States, which consist primarily of engineered wood, metal, and insulation products. BlueLinx Holdings Inc. (NYSE:BXC) serves dealers, specialty distributors, national home centers, and manufactured housing customers through a chain of distribution centers.
Travis Cocke, via Voss Capital, established a position in BlueLinx Holdings Inc. (NYSE:BXC) in Q3 2020, and after disposing and buying shares over time, as of Q3 2021, he owns 275,114 shares of BlueLinx Holdings Inc. (NYSE:BXC). The hedge fund’s position is worth $13.4 million, representing 5.52% of the total 13F securities for the period.
On October 18, BlueLinx Holdings Inc. (NYSE:BXC) announced that it would sell $300 million aggregate principal amount of its 6.00% senior secured notes due 2029 in a private offering closing on October 25. The 2029 notes were priced to investors at 98.625% of their principal amount and will mature on November 15, 2029.
DA Davidson analyst Kurt Yinger on December 17 initiated BlueLinx Holdings Inc. (NYSE:BXC) with a Buy rating and a price target of $102, implying an upside of 26%. The analyst further cited the positive medium to long-term implications of BlueLinx Holdings Inc. (NYSE:BXC)’s significantly improved balance sheet and modest valuation.
According to Insider Monkey’s Q3 data, 14 hedge funds were long BlueLinx Holdings Inc. (NYSE:BXC), with stakes totaling $117.6 million. Nokomis Capital is the biggest stakeholder of the company, with a $23.3 million position at the close of the third quarter.
Like Builders FirstSource, Inc. (NYSE:BLDR), Blackstone Inc. (NYSE:BX), and Mr. Cooper Group Inc. (NASDAQ:COOP), BlueLinx Holdings Inc. (NYSE:BXC) is gaining the interest of smart investors.
Here is what Voss Capital has to say about BlueLinx Holdings Inc. (NYSE:BXC) in its Q3 2021 investor letter:
“We believe those calling for a peak in housing activity have grown too cautious too soon. Most of the bearish arguments we encounter appear more sentiment based, e.g., prices have come too far too fast. Setting aside this understandably inherent acrophobia-induced caution and focusing more squarely on empirical evidence, the supply/demand picture remains on solid footing thanks to continued record low housing inventory accompanying fresh 30-year lows in single family and multifamily vacancies.6 Furthermore, roughly 2 million more people will turn 35 years old annually over the next five years, as compared to the previous five years. Since 35 is the peak first time home buying age, we believe there will be sustained demand for years to come. Our long portfolio remains heavily geared to entry-level housing related companies, as well as those tied to home remodeling.
One of our preferred ways to express this bullish thematic view is through BlueLinx Holdings Inc. (BXC). We knew investors had been bracing for a profit collapse on the back of a fast 73% decline in lumber prices that occurred from May to September, but we had a differentiated view based on the company’s earnings mix that is skewed to Specialty products with less volatile pricing as opposed to purely commoditized framing lumber. The stock continues to be overly discounted based on apathy, ambiguity, and fear over the housing cycle. By our math, even in the unlikely event that BXC’s Structural Products segment produces $0.00 in gross profits over the next year (compared to $187.7M LTM) and their Specialty segment revenue declines 5-10% from here, the company still has sustainable earnings power in excess of $12 per share. At 10x earnings, a modest discount to the company’s long-term P/E ratio despite the balance sheet being deleveraged, the stock still has 63% upside. A more reasonable earnings power estimate is in the $16.50-$19.00 range, which puts the stock under 4x fully taxed net income. Unfortunately, the Board did not pull the trigger on any of their authorized share buybacks last quarter before the stock rose 50% after earnings. If they sharpen their pencils anytime soon and buy stock back at this depressed valuation, the normalized EPS number should only move higher.”
5. International Money Express, Inc. (NASDAQ:IMXI)
Voss Capital’s Stake Value: $16,783,000
Percentage of Voss Capital’s 13F Portfolio: 6.89%
Number of Hedge Fund Holders: 19
International Money Express, Inc. (NASDAQ:IMXI) is a Miami-based company that offers money remittance services in the United States, Latin America, Mexico, Africa, Central and South America, and the Caribbean. The company also provides financial processing solutions and payment services such as online payment options, prepaid debit cards, and direct deposit payroll cards.
Voss Capital purchased a stake in International Money Express, Inc. (NASDAQ:IMXI) in Q2 2021, buying 766,467 shares of the company, worth $11.3 million. The hedge fund elevated its position in International Money Express, Inc. (NASDAQ:IMXI) in the third quarter of 2021 by 31.12%, holding more than 1 million shares amounting to $16.7 million. The stock accounts for 6.89% of Travis Cocke’s third quarter investments.
On November 4, Credit Suisse analyst Nik Cremo maintained International Money Express, Inc. (NASDAQ:IMXI) with a Neutral rating and raised the price target on the shares from $18.5 to $19.
Headlands Capital is the leading stakeholder of International Money Express, Inc. (NASDAQ:IMXI) as of Q3 2021, with 1.6 million shares worth $28.3 million. Overall, 19 hedge funds were bullish on the stock in the third quarter.
Here is what Voss Capital has to say about International Money Express, Inc. (NASDAQ:IMXI) in its Q2 2021 investor letter:
“We believe Intermex (International Money Express, IMXI) is a compelling long. IMXI is an international money remittance company that focuses primarily on transactions emanating from the United States and going to Mexico and Guatemala. They make their money by charging a fixed fee for each remittance transaction (85% of revenue), and to a lesser degree from foreign exchange arbitrage on transactions (14%). Their customer base is primarily low-income and under-banked immigrants from Mexico and Guatemala with family/friends remaining in their home country that need financial support. We believe IMXI is a simple story to understand, with a clean capital structure, very low capital intensity (outside of some working capital swings), a strong brand, savvy management, and excellent ongoing execution (e.g., 15-20% growth at high incremental margins). We believe there are flaws in the negative narrative surrounding the company that we can exploit, namely the skepticism around the sustainability of its growth, the stickiness of the customer base, and a misunderstanding about the economics of a digital remittance transaction versus in-person.
The consensus narrative on Wall Street is that IMXI is making a strategic error by not going “all in” on digital transactions, as MoneyGram (MGI), Western Union (WU), and well-backed private competitors like Remitly and Wise are. You will hear that the wave of VC money shows you what the future beholds, and remittances initiated via physical brick & mortar stores are dying. As the digital transition occurs, Intermex will lose their customer base, and given the operating leverage in the model, profitability will be hit hard. Bears also argue that digital is cheaper, easier, and should create a stickier customer base in the long term. Furthermore, Intermex’s focus on only a few markets makes it hard to scale the business and they will quickly run into a wall on growth. (Click here to read the full text)
4. Extreme Networks, Inc. (NASDAQ:EXTR)
Voss Capital’s Stake Value: $18,866,000
Percentage of Voss Capital’s 13F Portfolio: 7.74%
Number of Hedge Fund Holders: 20
Extreme Networks, Inc. (NASDAQ:EXTR), a North Carolina-based company providing software-driven networking solutions worldwide, is one of the top stock picks of Travis Cocke’s Voss Capital as of Q3 2021. The hedge fund elevated its position in Extreme Networks, Inc. (NASDAQ:EXTR) by 16% in the third quarter, holding 1.9 million shares worth $18.8 million. The Extreme Networks, Inc. (NASDAQ:EXTR) stock represents 7.74% of the fund’s total Q3 securities.
Needham analyst Alex Henderson maintained a Buy rating on Extreme Networks, Inc. (NASDAQ:EXTR) on December 28 and set a price target of $18.50.
Publishing its financial results for Q4 2021 on January 27, Extreme Networks, Inc. (NASDAQ:EXTR) posted earnings per share of $0.21, beating estimates by $0.04. The $280.90 million revenue jumped 16.1% from the prior-year quarter, outperforming consensus estimates by $8.83 million.
A total of 20 hedge funds monitored by Insider Monkey in Q3 2021 were bullish on Extreme Networks, Inc. (NASDAQ:EXTR), with stakes equaling $123.8 million. Arrowstreet Capital held the leading stake in Extreme Networks, Inc. (NASDAQ:EXTR) during the third quarter, owning 2.25 million shares worth $22.1 million.
3. Sierra Wireless, Inc. (NASDAQ:SWIR)
Voss Capital’s Stake Value: $19,032,000
Percentage of Voss Capital’s 13F Portfolio: 7.81%
Number of Hedge Fund Holders: 14
Sierra Wireless, Inc. (NASDAQ:SWIR) is a Canadian company that provides device-to-cloud IoT solutions, connectivity services, cloud management software, and cellular modules and gateways to enterprise and industrial customers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
Travis Cocke initially purchased shares of Sierra Wireless, Inc. (NASDAQ:SWIR) in the second quarter of 2021, and he boosted his position in the company by 423% in Q3 2021, holding 1.2 million shares worth $19 million. The Sierra Wireless, Inc. (NASDAQ:SWIR) stock accounts for 7.81% of his Q3 13F portfolio.
On January 20, to strengthen its balance sheet and provide additional liquidity, Sierra Wireless, Inc. (NASDAQ:SWIR) entered into a credit agreement for a new debt financing facility for C$60 million with a 4-years term. CIBC Innovation Banking and the Business Development Bank of Canada were the lenders for this program.
Trigran Investments is the biggest stakeholder of Sierra Wireless, Inc. (NASDAQ:SWIR) as of the third quarter of 2021, owning approximately 5 million shares worth $77.3 million. Overall, according to the Q3 database of Insider Monkey, 14 hedge funds were bullish on Sierra Wireless, Inc. (NASDAQ:SWIR), with collective stakes totaling $178.6 million.
Here is what Voss Capital has to say about Sierra Wireless, Inc. (NASDAQ:SWIR) in its Q3 2021 investor letter:
“We have had some success by investing in hardware-to-software business transitions, specifically with Extreme Networks (EXTR), Avid Technologies (AVID), and PAR Technologies (PAR). Our underlying thesis has been that these transitions are less understood and perceived to be riskier than perpetual software to SaaS software conversion stories. Indeed, transition is typically longer and requires more fundamental disruption, as the hardware R&D/sales process is significantly different than a Perpetual License to SaaS change. However, if you have a large captive customer base and a competent management team to execute on the plan, the rewards can be even greater, since the company often starts from a much lower valuation than a traditional software company.
It is against this backdrop that we introduce a new core sized position (a 6.6% portfolio weight), Sierra Wireless (SWIR). Sierra Wireless has a long and winding corporate history. By our count, they have gone through eight total business pivots from their IPO at the height of the Internet bubble through today, leaving many long-term investors understandably skeptical of yet another strategy pivot by newly appointed CEO Phil Brace…” (Click here to read the full text)
2. Griffon Corporation (NYSE:GFF)
Voss Capital’s Stake Value: $23,370,000
Percentage of Voss Capital’s 13F Portfolio: 9.59%
Number of Hedge Fund Holders: 11
Headquartered in New York, Griffon Corporation (NYSE:GFF) provides consumer and professional home building products in the United States, Europe, Canada, Australia, and internationally. The company was previously known as Instrument Systems Corporation and rebranded to Griffon Corporation (NYSE:GFF) in June 1992.
Voss Capital purchased 950,000 shares of Griffon Corporation (NYSE:GFF) in the third quarter of 2021, worth $23.3 million, representing 9.59% of the fund’s 13F portfolio for the period.
On February 1, Griffon Corporation (NYSE:GFF) declared a $0.09 per share quarterly dividend, in line with previous. The dividend is payable on March 23, to shareholders of record on February 23.
According to Insider Monkey’s Q3 data, 11 hedge funds were long Griffon Corporation (NYSE:GFF), with stakes totaling $156.6 million, as compared to 10 funds in the prior quarter, holding stakes in Griffon Corporation (NYSE:GFF) worth $148.8 million. The biggest stakeholder of the company is GAMCO Investors, with a $92.6 million position at the close of the third quarter of 2021.
1. Rimini Street, Inc. (NASDAQ:RMNI)
Voss Capital’s Stake Value: $27,696,000
Percentage of Voss Capital’s 13F Portfolio: 11.37%
Number of Hedge Fund Holders: 16
Rimini Street, Inc. (NASDAQ:RMNI) is a Nevada-based company specializing in enterprise-level Oracle and SAP software products, services, and technical support for multiple industries. Rimini Street, Inc. (NASDAQ:RMNI) sells its solutions via direct sales organizations in North America, Latin America, Europe, Africa, the Middle East, Asia, and the Asia Pacific.
Travis Cocke owns 2.87 million shares of Rimini Street, Inc. (NASDAQ:RMNI) as of Q3 2021, worth $27.6 million, representing 11.37% of his total third quarter investments. Rimini Street, Inc. (NASDAQ:RMNI) is the biggest holding in Voss Capital’s Q3 portfolio.
On January 19, Roth Capital analyst Richard Baldry upgraded Rimini Street, Inc. (NASDAQ:RMNI) to Buy from Neutral with an $8 price target, suggesting an upside of 53%.
According to Insider Monkey’s Q3 database, 16 hedge funds were long Rimini Street, Inc. (NASDAQ:RMNI), with stakes totaling $289.6 million. Adams Street Partners is the biggest stakeholder of Rimini Street, Inc. (NASDAQ:RMNI) as of Q3 2021, with 23.5 million shares worth $227.40 million.
Here is what Greystone Capital Management has to say about Rimini Street, Inc. (NASDAQ:RMNI) in their Q1 2021 investor letter:
“During the quarter I significantly added to client holdings in Rimini Street which has now become a top four position due to both additional purchases and share price appreciation from our initial cost basis. The reasoning behind the purchases, especially at prices 70-100% above where we initially started buying include information gleaned from management during the company’s February investor day event, as well as what I believe to be the business hitting an operational inflection point. I wrote about Rimini Street in the Q3 2020 letter, but things have progressed quickly in a positive way and there have now emerged what I believe to be multiple paths to achieve a very favorable return moving forward with a strong risk/reward profile.
With a clear valuation disconnect in place from an EV/ARR or EV/Gross Profit basis, Rimini Street is currently one of the cheapest profitable SaaS related stocks among a universe of inferior software companies. While I can point to some clear reasons for the undervaluation (which I believe will be transitory), the valuation discrepancy compared to lower quality businesses trading at high multiples of revenue does not make sense to me. Furthermore, as discussed below, I believe the company is taking the necessary steps to clean up the story which will have the effect of shining a light on the strength of the business and competitive position. (Click to read the full text)
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Disclosure: None. Top 10 Stock Picks of Travis Cocke’s Voss Capital is originally published on Insider Monkey.
