Corsair Capital Management is a value-driven investment manager that focuses on conducting extensive due diligence to give it an edge in identifying positive discrepancies between price and intrinsic value. The firm recently released its 1Q 2011 shareholder letter, in which is profiled IDT Corporation (NYSE: IDT) a multinational holding company with operations primarily in the telecommunications and energy industries. The firm had this to say about IDT:
The market has historically viewed IDT as a collection of unrelated businesses run by an undisciplined management team. Recently, however, management has reinvigorated the company with shareholder-friendly decision-making and prudent execution. IDT management has stated its intention to spin off more assets this year. We believe that the coming transactions will not only help the businesses strategically but also highlight their embedded worth. Using what we believe to be conservative assumptions, we see $38-$57 per share of value at IDT and expect the market to recognize this in the near to medium term. IDT’s net cash balance of $11 per share provides an adequate margin of safety.
In 2008, as the company’s cash shrank and its stock price declined, the company drew a delisting notification from the NYSE. IDT’s founder, Howard Jonas, returned as CEO and embarked on what has proven to be an amazing turnaround story. The new management team slashed costs and divested cash-burning businesses, whittling down the old IDT into several valuable assets and a cash pile. Despite a history of investing in speculative enterprises and running a generous corporate budget, we believe Jonas and his management team have found religion in operating an efficient, shareholder-friendly company. Management even held its first ever investor day recently to highlight this change in philosophy and the opportunities that lie ahead…
In November 2010, IDT announced that it will be splitting apart the company by spinning off what will be called Genie Energy.
Read the rest of Corsair’s extensive profile of IDT in the embedded PDF on this site.
Covestor models that have positions in IDT as of 5/10 include two models by manager Analytic Investments:
Sources:
“Corsair Capital Anticipates Increased M&A Activity: Investor Letter” Market Folly, 5/6. http://www.marketfolly.com/2011/05/corsair-capital-anticipates-increased-m.html
