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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (65559)	12/1/2020 10:14:19 AM
From: JohnyP	1 Recommendation Recommended By E_K_S Read Replies (2) of 78774

My take on MAC: Let's assume a worst case valuation of its real estate based on cap rate. Q3 should be the worst case scenario and we would expect numbers to improve going forward. Based on that low NOI of $152 million for Q3, if we annualize it, it will be 4*152 = $608 million. For a cap rate at 6% the assets of MAC are worth 608/0.06 = $10.1 Billion. Looking at the balance sheet: The real estate assets on the books are around $8Billion including the joint ventures. Therefore, real estate is understated on the books by at least $2.1 Billion, and this while using the most conservative numbers. If we use NOI of all centers for Q3 the value of assets would be higher. Now MAC has an equity of $2,4 Billion on the books. Adding an extra hidden $2,1 Billion under a very conservative scenario would give a book value of $4.5 B. With current market cap at $1,6 Billion there seems to be a big margin of safety for the stock to double or triple in the next years. Let me know if I am missing something!

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