Kenneth Orr's Simple Question: Does the Business Make Sense?

Kenneth Orr, an activist investor and CEO of KORR Acquisitions Group, has built a career following a simple truth: good businesses aren't complicated. Known for his focus on companies with clear models, understandable cash flows, and defensible positions—particularly in industrial and manufacturing sectors—Orr has long favored fundamentals over flash. Orr's investment in GrafTech International is the latest example of his principles in action.

While it may not make headlines, GrafTech sits at the heart of a major industrial transformation. The company manufactures graphite electrodes—a key component in electric arc furnaces (EAFs), which are fast becoming the steel industry's method of choice. Unlike traditional blast furnaces, EAFs rely on recycled scrap and electricity, offering a cleaner, more efficient alternative.

"These aren't just one-and-done products," Orr says. "Every eight-hour shift at a steel plant requires new electrodes. That's built-in demand."

To Orr, that kind of recurring demand means more than just steady revenue—it's a sign of resilience. GrafTech fits his mold: a mission-critical supplier with a straightforward, scalable model.

"The best investments," he adds, "are the ones you can explain without a PowerPoint. GrafTech makes something the world needs—and needs over and over again."

What further strengthens GrafTech's position is its rare vertical integration. Unlike most competitors, it owns a Texas-based facility that produces petroleum needle coke, the main raw material used in its electrodes. That level of control over the supply chain brings cost certainty and builds a defensive moat, especially in volatile markets.

"Most companies are still figuring out how to manage upstream risk," Orr notes. "GrafTech already solved it."

That operational advantage, however, has largely gone unnoticed. After peaking near $20 per share, GrafTech's stock fell to just over $1—a drop Orr attributes to leadership missteps, a downturn in the steel cycle, and a broader investor shift away from capital-intensive sectors. Yet when he analyzed the company's normalized earnings and the replacement cost of its assets, the value gap was clear.

Orr estimates that, under favorable conditions, the company could earn more than $2.50 per share, which he believes supports a potential valuation in the $25 to $30 range. One sign of validation came when India's HEG Limited, a direct competitor, disclosed a stake in GrafTech and publicly stated it preferred the investment in GrafTech over buying back its own shares.

Yet Orr's activism isn't loud. Unlike more confrontational investors, he favors diplomacy. With GrafTech, he has quietly supported the board refresh, welcomed debt refinancing, and encouraged stronger shareholder communication, all while working behind the scenes.

"Sometimes your best work as an activist isn't visible to the public," he says. "It's about making the right call, working constructively, and letting the business prove itself."

He sees additional upside in underutilized assets, particularly the company's Saint Mary's facility in Pennsylvania, which has remained idle. Restarting operations or repurposing the plant could increase capacity at a time when domestic production is both politically and economically incentivized.

That political tailwind is no small factor. GrafTech stands to benefit from reshoring, infrastructure investment, and a policy landscape increasingly focused on reducing emissions. Since electric arc furnaces produce significantly less carbon than traditional methods, the company's electrodes play a vital role in supporting low-carbon steelmaking.

"There's this myth that value investors don't care about ESG," Orr says. "That's just not true. I care deeply about sustainability, but only when it's anchored in a viable business model. GrafTech checks both boxes."

Still, Orr doesn't deal in certainties. He acknowledges macroeconomic risks, regularly revisits his assumptions, and continues to emphasize fundamentals over forecasts. What matters most to him is finding companies where the true earnings power is misunderstood—businesses that simply need time to prove their worth. In his view, when that moment comes, the market adjusts quickly.

For Orr, GrafTech resembles the kind of bet Carl Icahn might have made in his prime: a misunderstood industrial asset with long-term upside and limited downside. It's not a flashy story. It's a logical one.

"If you want to outperform, you have to take risks others avoid," he says. "That means stepping back and asking the simplest question: does this business make sense?"