Commentary

In the 18 months since our original report on Korn Ferry, available at kerr.co/kfy, we’ve gained further conviction that the company’s combination of strong revenue growth, attractive incremental margins, and higher subscription revenue mix will continue to drive estimates and multiples higher.

Korn Ferry is the dominant executive search firm and is successfully transforming into a digital-first global consulting organization with a leading technology platform. The company brings an increasingly diversified revenue mix that’s lowered cyclicality in the business, and a scale advantage that is not reflected in its current valuation when comparing KFY to its sub-scale private competitors or firms competing down-market. The company’s recent proxy suggests management wants us to comp the business to commercial real-estate companies like Jones Lang Lasalle Inc. and asset-light dominant franchises like Nielson Holdings plc, and we agree. Korn Ferry’s business model shares many similarities to the commercial real-estate market, including share gains in a fragmented market providing consolidation opportunities, with a growing demand for outsourcing of services benefiting large established incumbents with diversified business segments like KFY. We think shares re-rate from current 8.5x EV/EBITDA multiple to 12 -14x, driving upside for the stock to the $100 – 110 range.

Read our full update here.

Since our last article on Intelsat, newsflow has continued to trend positively and point to major positive catalysts over the course of 2018, yet Intelsat shares have tumbled from the mid $20s to the mid teens. In this article, we provide updates to our thesis and timeline; for background, please also see our original report and 2018 update…

With shares 36% below last year’s highs, we believe an investment in Intelsat (NYSE: I) represents exceptional value ahead of important catalysts as the regulatory process enters its final stages. The bull thesis as laid out in our original, full-length report and subsequent…

Since we released our original, full-length report on Intelsat and SES a month ago, events have unfolded even more rapidly than we expected, and our confidence in the upside potential of these stocks, largely due to the underappreciated value of their US C-band spectrum, has only grown. Below we briefly summarize some of the key developments…

We have updated our report for AMERCO, the holding company that owns the do-it-yourself moving U-Haul business. The updated report includes the most recent earnings figures, current valuation and our updated views on the company’s future prospects.

Our full report can be accessed here, and is also embedded at the bottom of this post.

We continue to think that AMERCO (“UHAL” or the “Company”) is undervalued. AMERCO owns one of America’s most ubiquitous businesses: U-Haul, the nation’s dominant do-it-yourself (“DIY”) moving company. For over 60 years…

In mid-February, we shared our research report on AMERCO (UHAL), the deeply undervalued and underfollowed holding company that owns U-Haul, the nation’s dominant moving equipment rental company. At the time of our report, we outlined why investors could have acquired AMERCO for only 11x EPS despite the fact that its U-Haul truck rental business has a dominant and unassailable competitive lead in its niche industry, is earning record profits, and is taking market share as a result of its lower cost base, larger fleet and expanding network. In addition, we also highlighted how investors may have overlooked the fact that AMERCO generates nearly 30% of its free cash flow from its very valuable and steady self-storage real estate portfolio…

Over the past few weeks, we’ve profiled two of the case studies that we’ll be presenting for our upcoming speech on “Distressed Debt Activism In The Age Of Electronic Media” at the 6th Global Forum on Investing in Distressed Debt. In our first profile, we chronicled the public debate on General Growth Partners (GGP) between the long camp, consisting of Bill Ackman’s Pershing Square Capital and Whitney Tilson’s T2 Partners, and the short camp, consisting of Eric Hovde’s Hovde Capital. In our second profile, we documented Birch Run Capital’s activism on behalf of equity holders in the Chapter 11 bankruptcy case of Energy Partners Limited (EPL).

In our third and final case study, we’ll discuss our own work on Eagle Rock Energy Partners LP (EROC), a distressed master limited partnership that underwent a financial restructuring earlier this year to lighten its debt load and…

Below is the second part in our series on “Distressed Debt Activism In The Age Of Electronic Media”. We will be presenting on this topic at the 6th Global Forum on Investing in Distressed Debt, and thought it fitting to discuss on our blog some of the case studies which we’ll be profiling. Last week, we examined the very public Pershing-Tilson-Hovde debate over General Growth Properties, and next week, we’ll cover our own work on Eagle Rock Energy. This week, we’ll profile the activism of Birch Run Capital in the bankruptcy of Energy Partners Ltd. (EPL), an oil & gas operator that filed for bankruptcy in May 2009…

In September, we will be giving a presentation at the 6th Global Forum on Investing in Distressed Debt on the topic of “Distressed Debt Activism In The Age Of Electronic Media”. We’ll focus on how activist investors in distressed situations are increasingly using internet communication to achieve faster and more meaningful impacts on their targets.

Given that we publish an active blog, we’ll also write posts on the case studies that we’ll be profiling at the conference. We will discuss three examples where the internet has allowed distressed activists to share their analyses with a broader audience, recruit new investors and ultimately increase pressure on their intended targets. Our first case study, which we will profile in this post, is the battle between Pershing Square, T2 Partners and Hovde Capital over…