Corsair Capital Management is a value-driven investment manager that does heavy due diligence to try to gain an edge in identifying discrepancies between price and intrinsic value. The firm recently released its 1Q 2011 shareholder letter, where management discussed some of its recent investments. One of these was Globe Specialty Metals (NASDAQ: GSM) a producer of silicon metal and silicon-based alloys. The firm had this to say about GSM:
Globe Specialty Metals (“GSM”) again positively contributed to the portfolio. Amid rising silicon metal prices, operations ran smoothly, and GSM announced an acquisition of a 40,000MT greenfield silicon metal facility in Iceland. We expect the Iceland facility to be the lowest cost silicon metal plant in Europe given its competitive long-term power contracts, proximity to the ocean and ability to ship in bulk, and lack of duty for imports into the European Union. The acquisition allows GSM to expand its geographic footprint while maintaining its position on the low end of the cost curve. With the expiration of low-priced legacy contracts and completed scheduled maintenance in the second half of 2010, we anticipate a strong 2011. The stock ended the quarter at $22.76.
Covestor models that hold GSM as of 5/10 include Analytic Investments‘ Earnings Growth portfolio which
Using proprietary computer algorithms, Earning Growth Portfolio buys stocks with the highest upward earning revision and upside earning surprise. Stocks are sold when they have lesser earning revision and earning surprise relative to other growth stocks, and are replaced with stocks of stronger earning revision and earning surprise. This diversified portfolio typically holds at least 50 stocks, is long only, does not use margin, and does not trade leveraged or inverse ETF.
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
