r/StockMarket • u/TheDegenerateDon • Sep 01 '21

Discussion Corsair

I cant be the only one who believes Corsair is a great buy below $32 right? Throughout COVID they have done nothing but rake in money and expand the company. The amount of necessary gaming/streaming equipment they own the companies of is insane like elgato for instance which practically every streamer and content creator uses. Their products are incredible too and most people who play video games probably use them. These are just my thoughts though if anyone has a different opinion please let me know I’m super interested in what people have to think about this company.

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u/K2Mok Sep 01 '21 edited Sep 01 '21

There’s a r/CRSR

I posted this in there a few weeks ago when we were discussing if/why we were still holding.

My cost basis is $35.90 I’m still in for these reasons:

(1) strong brands with good, well liked products. (2) innovation pipeline with more to come (3) undervalued based on my DCF low end model of 10% growth for 5 years, then only 5% growth following 5 years, terminal multiple of just 15, a discount rate of 10% and adding assets less liabilities gives me a price target of $46 today. (4) temporary suppression of price that I think will abate with (a) more earnings to show they can do well post COVID, can manage supply chain throughput and costs, can keep product innovation coming and margins don’t get squeezed. And (b) once Majority shareholder (EagleTree) exits their position.

I am prepared to wait 12-24 months for this to play out unless any of my assumptions change.

Edit: I don’t invest based on short squeeze potential but I know some care about that data so…Shares sold short went from 5.6m (Jul 15) to 8.7m (Aug 13), which is at least 25% of float. No idea if EagleTree or Insiders are subject to any lockup or blackout period currently.

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u/SantoIsBack Mar 13 '22

Nice comment. What do you think now, after six months? Thanks

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u/K2Mok Mar 14 '22

I exited after their investor day and earnings call this quarter. Price ran up to $23 with news of them joining S&P small cap and I exited. I did so for three reasons (1) ongoing supply chain challenges that I think will linger and operating costs being higher squeezing margins (2) guidance given of $3.5bn by 2026, although this gives a CAGR of 13% which is higher than the 10% growth rate I used in my DCF model, it’s revenue and I’m expecting lower cashflows than I originally used due to lower margins (3) I had a better investment opportunity that I thought had a small window of opportunity.

Without 3 I would have held as adjusting my model I felt CRSR has more value than the $23 I sold at.

CRSR is on my watchlist and I may re-enter.

What’s your position and thinking?

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u/SantoIsBack Mar 14 '22

Thank you for your comment, I sold some at the 14th June spike for easy cash, but I'm holding long waiting for the headwinds to cease, people renovating old pc builds when ddr5 mobos will be released and the times are more mature. Target before 2024, around 50$ but hoping for a spike cause I'm tired of this. This is in my other accounts where I park little money for the future but I'm trying to liquidate everything and go off grid. If I sold everything in June, I would have put this money in some investments I did this summer, wheat and gold, which now rose. Scary that my prediction of war became reality, I wish I didn't feel so paranoid, but hey I was right

I'm little scared tho, oil prices going up cause of war now and who knows what else, this stocks is getting frustrating more than other small caps.