Cannae Holdings (CNNE), mcap=$1.7bn, price $19.11 vs $24.18

Pitch: Private equity firm led by Bill Foley with 84% of NAV in 5 public companies – previous IPOs and SPACs carried out by CNNE, including $CDAY, $DNB, $SST, $ALIT, $PSFE. Despite 3 holdings coming from SPACs, all holdings are well-established businesses with meaningful revenues. Historically $CNNE traded at a premium to NAV vs at a 40% discount now. Mgmt intends to continue share repurchases until the NAV gap closes. Risks of external management structure as well as taint from involvement in SPAC frenzy.

Valuation: NAV seems to be a reasonable estimate of intrinsic value, with public investments also at reasonable valuations. With 5% NAV CAGR from 2022-24 and no further share repurchases (besides the existing 6% auth.), NAV grows to $50 by end 2024 – 109% upside in <3 years.

Exp. Gain: +72% to current NAV, or +109% to exp. $50 NAV in 2024 (5% CAGR).

Full CNNE write-up (free guest account required):


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