Curreen Capital Partners, LP on TriNet Group
Thesis
Curreen added to TriNet because it viewed the company as an excellent business emerging from a difficult operating period at an unusually cheap valuation. Rapid changes in healthcare costs made insurance pricing difficult, forcing substantial price increases and customer losses. The fund believes TriNet now has a better understanding of its healthcare costs and pricing, while profit margins are recovering toward historical levels. Curreen concluded that operating results had bottomed and that continued improvement should drive the share price higher over the coming years. It funded the increase by selling Truecaller and Pluxee because TriNet appeared cheaper and further along in its recovery.
“I believe that TriNet's operating results have bottomed and will continue to improve.”
Key risks
- Healthcare cost volatility could again make pricing difficult.
- Past price increases caused customer losses.
- The turnaround depends on operating margins continuing to recover.