I am doubling down on Wereldhave ( WHA): their 66% stake in the public company Wereldhave Belgium ( WEHB) is now worth more than WHA's market cap, i.e. €330 and €325, respectively! And for some reason WHA keeps dropping hard. Is this irrationality? I think so, as about three quarters of the company: the French and Dutch assets/cash flows are to be "bought" for free now. These assets represent 80% of total investment properties in operation and 80% of operating results (ex result on disposals). Dividend will be €1.75 next year, i.e. more than 22% at current share prices of €7.95. I spot limited downside at these prices, EPRA NAV is at €33 (that is after already huge write-offs that occurred this year), hence a potentially huge upside, while getting some nice bulk of shekels in the mean time. I - AM - BUYING.
-- Nya --
P.S. I have only seen these kind of situations, i.e. some company having a portfolio worth more than the market value of the company itself, in books. Am I dreaming? |
What you are describing happens more often than you would think. I do agree that the WHA.AS valuation seems extreme, but shopping malls trade a low valuations everywhere. I know of US Reits (not shopping malls) that trade at <50% of NAV (pre crisis of course, I don't think there are any bids right now) , with solid finances and they aren’t even malls. VNO is one I own in small quantities.
Anyways, if you really believe that WHA is grossly undervalued relative to their Belgian sub, you should buy WHA.AS and sell short the Belgium sub. That way you are making a relative value trade that should work out regardless of what the market is doing.
Good luck. FWIW, I do think this crisis will accelerate secular changes dramatically. Hard to say which way, but I think Amazon will be a huge winner from this. There are many others that may not be obvious. |
