180 Degree Capital Corp., an investment management firm, recently released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. This recession has caused investors to move their capital away from risky assets to safer ones. Despite predictions of a return to higher interest rates, the economy has not suffered any major setbacks. Instead, GDP has risen by 3.1%, wages and salaries have grown by 4.7%, real private fixed investment in manufacturing structures has reached record highs, and employment rates remain strong. In the fourth quarter of 2023, there was a positive change in the market as it believes that investors will start to take more risks, including investing in microcapitalization stocks. The Fund’s public portfolio had a gross total return of +6.9%, which was the main reason for the increase in NAV per share from $4.91 to $5.02. For more information on the fund’s top picks in 2023, please check its top five holdings.
180 Degree Capital Corp. featured stocks like ComScore, Inc. (NASDAQ:SCOR) in the fourth quarter 2023 investor letter. Based in Reston, Virginia, ComScore, Inc. (NASDAQ:SCOR) is an information and analytics company. On March 5, 2024, ComScore, Inc. (NASDAQ:SCOR) stock closed at $18.44 per share. One-month return of ComScore, Inc. (NASDAQ:SCOR) was -1.71%, and its shares lost 21.86% of their value over the last 52 weeks. ComScore, Inc. (NASDAQ:SCOR) has a market capitalization of $87.685 million.
180 Degree Capital Corp stated the following regarding ComScore, Inc. (NASDAQ:SCOR) in its fourth quarter 2023 investor letter:
“Our initial investment in ComScore, Inc. (NASDAQ:SCOR) took place in 2021, following its recapitalization by Charter, Cerberus and Liberty Media (Qurate). Our original thesis for our investment was centered on multiple factors including our beliefs that: (i) SCOR was a company with uniquely competitive media measurement offerings and proprietary data; (ii) SCOR’s new investors could help with improved execution, financial performance and overall growth; and (iii) SCOR traded at a significant discount to its peers.
While SCOR’s business has improved dramatically under new management with 33% EBITDA growth over the last two years, SCOR’s stock has declined precipitously. We believe this is due to poor corporate governance and uncertainty around SCOR’s capital structure. As a result, we have ramped up our activism significantly through the nomination of Matthew F. McLaughlin as a director nominee for consideration at SCOR’s upcoming annual meeting of stockholders. Matt is a retired advertising technology executive and Naval officer. Most recently, he served as Chief Operating Officer of DoubleVerify Holdings, Inc. (NYSE: DV) (“DoubleVerify”), a software platform for digital media measurement and analytics, from 2011 to March 2022. As COO of DoubleVerify, Matt directed its Product, Engineering and Sales Operations activity, including managing over half the company’s employees. Given SCOR’s struggles with, and focus on, improving its digital offerings, we could think of nobody more useful to the SCOR Board and management than Matt. Matt is available and happy to speak with any SCOR stockholder that wishes to speak with him so they can judge for themselves whether he is qualified and should serve on SCOR’s Board. While we are actively preparing to run a competitive proxy campaign to support his candidacy, we hope SCOR’s Board will realize the complementary skill set that we believe he can bring to help build value for all of SCOR’s stakeholders and that a competitive proxy contest will not be required.
As we look forward to 2024, we see a number of potential value-creating catalysts (in addition to our activism) that could lead to material appreciation in the stock. These potential catalysts include: (i) SCOR’s preferred stockholders taking steps to demonstrate an alignment of interests across all stakeholders of the company; (ii) SCOR demonstrating the ability to consistently generate double-digit EBITDA margins; and (iii) a return to growth for SCOR’s digital business. Assuming SCOR can continue to generate mid-teens EBITDA in 2024, then its common stock is trading at just 4.7x enterprise value to EBITDA and 0.75x enterprise value to revenue; we believe this will ultimately prove to be an attractive entry price. We do not believe that either of these multiples are appropriate for a company with unique data assets that generate positive cash flows. We believe a more appropriate multiple would be in the double-digit range. We firmly believe that improvements in SCOR’s corporate governance combined with improving financial metrics and the demonstration of alignment of all stakeholders can lead to material appreciation in SCOR’s common stock.”
A video engineer working with advanced technological tools to analyze data from various platforms.
ComScore, Inc. (NASDAQ:SCOR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, ComScore, Inc. (NASDAQ:SCOR) was held by 6 hedge fund portfolios, down from 14 in the previous quarter, according to our database.
We discussed ComScore, Inc. (NASDAQ:SCOR) in another article and shared long-term returns of Jeff Smith’s activist targets. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
