Ryan O’Connor presented his in-depth investment thesis on Cision / Capitol Acquisition Corp. III (Nasdaq: CLAC) at Wide-Moat Investing Summit 2017.
Cision is a market-leading provider of cloud-based earned media solutions that is well positioned to benefit from the coming disruptive wave. The business was originally cherry-picked by prominent private equity firm GTCR in 2014 in hopes of building Cision into a global, comprehensive software-as-a-service (SaaS)-based platform capable of managing the entire life cycle and evolving needs of communications professionals.
The next phase in the company’s ongoing “big data” evolution commenced with a “back-door” IPO on June 29, 2017 via a complicated SPAC transaction with Capitol Acquisition Corp III. Analyzing the deal requires attention to detail and “special situations” investment skill, leaving it “opaque” and temporarily uninvestable to most investors.
Cision is a stable, high-quality cash flow business with underappreciated economics and durable competitive advantages, operating in an attractive niche of the PR software and services market (resilient demand, secular tailwinds, and GDP+ growth). It is rare to find such an attractive, capital-light company with growing recurring revenues and expanding margins trading at a significant discount to peers, despite more compelling financial metrics, better growth, and superior leadership. While the equity is mispriced, the warrants are even more so, in Ryan’s opinion, creating an attractive, hugely asymmetric, levered bet on a temporarily under-the-radar high-quality business.
About the instructor:
Ryan O’Connor is Co-Founder & Portfolio Manager of Crossroads Capital, LLC, a Kansas City based, value-oriented investment manager currently serving a select number of like minded individuals and families via a private investment partnership. Ryan possesses ten years of verifiable achievement in researching and analyzing alpha generating investments, and his proven history of generating compelling risk-adjusted returns has led to his membership in several elite investing associations, including Value Investors Club, an exclusive community of top money managers – as well as recognition as the managing editor of Above Average Odds Investing, a widely heralded website devoted to timely investment analysis on securities characterized by high margins of safety and asymmetric risk/rewards. Prior to falling in love with securities analysis, Ryan studied Economics at Indiana University before a brief start as an options trader on the Chicago Mercantile Exchange.
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