Investment management company Maran Capital Management recently released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. Maran Partners Fund returned +0.9%, net of all fees and expenses in the second quarter and +6.1% net year-to-date. The fund is compounded at the rate of 12% per year, net over the last five years. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Maran Capital Management highlighted stocks like Clarus Corporation (NASDAQ:CLAR) in the second quarter 2023 investor letter. Headquartered in Salt Lake City, Utah, Clarus Corporation (NASDAQ:CLAR) is an outdoor equipment and lifestyle products manufacturer. On August 4, 2023, Clarus Corporation (NASDAQ:CLAR) stock closed at $8.55 per share. One-month return of Clarus Corporation (NASDAQ:CLAR) was 1.54%, and its shares lost 58.35% of their value over the last 52 weeks. Clarus Corporation (NASDAQ:CLAR) has a market capitalization of $317.977 million.
Maran Capital Management made the following comment about Clarus Corporation (NASDAQ:CLAR) in its second quarter 2023 investor letter:
“Clarus Corporation (NASDAQ:CLAR) is an example of a situation in which I believe the market is incorrectly extrapolating recent challenging results far into the future. While perhaps not exactly trading at “trough on trough,” the current approximate 7x EBITDA multiple on depressed earnings(in at least two of its three segments) puts it close. Black Diamond Equipment, Clarus’ largest segment, may only generate $10-15 million of EBITDA this year, as the US wholesale market is soft (REI and its peers entered the year with too much inventory), but I believe its normalized earnings power is in the 10-16% EBITDA margin range on $250 million of normalized sales, or $25-40 million of normalized EBITDA.
I believe Clarus remains a highly asymmetric stock. Downside is perhaps around $7/sh, while upside could be to well over $20/sh over the next few years. I think you really have to make punitive assumptions to get to the current stock price, while reasonable assumptions about the value of the business yields upside of 50-100%+. Private market value, which I believe is a solid benchmark for valuation, is probably twice where the stock is trading.
I think Clarus’ bullet business is worth $200-300 million. Rhino Rack and the overlanding businesses could be worth over $200 million. And Black Diamond is probably worth somewhere in the range of $250-$500 million. This gets us $600 million on the low end and $1 billion on the upper end, or $13 to $24 per share.”
Pixabay/Public Domain
Clarus Corporation (NASDAQ:CLAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Clarus Corporation (NASDAQ:CLAR) at the end of first quarter which was 19 in the previous quarter.
We discussed Clarus Corporation (NASDAQ:CLAR) in another article and shared Maran Capital Management’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.
