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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (56453)	12/30/2015 12:21:06 AM
From: Jurgis Bekepuris	Respond to of 78748

Happy Holidays Spekulatius and everyone else on the board! :)

To: Spekulatius who wrote (56453)	3/19/2017 1:21:17 PM
From: Spekulatius	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78748

The Microcaps real estate company I have been buying recently is MNPP (Merchants National Properties). This is an OTC company trading around $1850/ share with ~93k shares outstanding. The company does not file, but the audited financials are published yearly on their website and look pretty good. marxrealty.com Valuation wise, the company trades at a moderate premium to stated book ($1600/ share). profits were around $82/share. EBITDA is around $270/share. There is about $100M in debt outstanding, mostly mortgages on their limited partnerships. I do not know this number exactly, but this is based on the grossed up interest rates they have published and assuming a 5% interest rate. The is about $1100/ share. The do have liquid investments of about 33M or about $370 share to offset (interesting enough this investment had a cost basis of only 700k, so it has done incredibly well!). Most of their properties are interests in partnerships around NYC and CT, including a 30%+ stake in a class A mall in Yonkers, NY with sales of $780/sqfst and some buildings in Manhattan ( near the UN headquarter, 708 Third Street, Park Avenue and Madison Ave). This is fairly prime real estate. I calculated the NOI cap rate, based on the balance sheet metrics and my assumption of net debt at around 10%, which I think is a 50% discount based on prevailing market prices. Disadvantages of this investment are illiquidity, tax disadvantage of being incorporated as C-Corp and a somewhat elevated corporate overhead. I bought a huge (for me) chunk of shares recently, simply because there was an apparent seller who made shares available. I think it is due to the CEO leaving for another job and I suspect he is selling some of his shares. You think is a fairly safe long term bet. The stock may not go anywhere quick, but I think the assets are of very high quality and trade at a substantial discount to fair market value.