Aug 30, 2023
On Tuesday, we exited our position in Verra Mobility Corp (VRRM) on behalf of clients in our Opportunities strategy. The results of the trade have increased our strategic cash positioning and decreased our net exposure, for now. As the market digests the concluding results from earnings season, we plan to be tactical in getting our dry powder to work as we see opportunities arise.
Let’s dive in.
Our original thesis for Verra Mobility centered around its leading position in outsourced toll management and traffic enforcement, underpinned by high barriers to entry and a dominant market position. Though our assumptions around the resiliency in traffic enforcement proved to be correct, we have become concerned that a potential slowdown in domestic travel might impact the tolling business, and consequently free cash flow growth.
Ernst & Young stepping down as Verra Mobility’s auditor yesterday was the ‘final straw’, as the increasing risks outweighed the opportunities at hand.
After growing nearly 27% year-to-date, we made the decision to exit the position. The proceeds have solidified gains for clients and have been added to our strategic cash for the time being. As we work through the concluding results from earnings season, we expect to be tactical in deploying some of this strategic cash when opportunities present themselves.
As always, let us know if you have any questions about the recent trades; we’re happy to assist.
– Your Titan Team
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