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

To: Spekulatius who wrote (62863)	11/17/2019 6:35:32 PM
From: Nya_Quy	1 Recommendation Recommended By Lance Bredvold Read Replies (2) \| Respond to of 78464

Hi Spekulatius! (...) but they are having negative fair value marks and dividend cuts (due to lower FFO due to dispositions) for a couple Of years, so this is regarded as a melting ice cube and valued as such. Something I noticed. The total size of the company, i.e. the total invested capital, peaked in '16 at about 3.7 bln and has indeed been decreasing: it reached 3.2 bln in H1'19, thus reaching the same size it had in '14. However, it is now generating 25% more in FCF even though having almost doubled the maintenance CAPEX: from 4.2 mln in '14 to 8 mln in H1'19. In other words, compared to '14, by the focusing operations to three countries only plus 4 mln more in maintenance CAPEX has resulted in 20 mln of additional FCF: €0.75/share. The 2018 annual report states the following about the valuation of investment property: As transactions involving similar investment property are not occurring, some DCF estimate has to be made of the value of the property. But we all know what happens when making assumptions regarding future development of so many factors: mistakes are made and extrapolation is the norm. Looking ahead more than 3 years is hard, that is why the assets are valuated every 6 months while the value of the assets themselves depends mostly on the CF it can generate 10 years from now, not taking into account all the other above mentioned factors further influencing the value of the assets. The question thus is: how reliable is the NAV really? Secondly, WHA is not in the business of flipping real estate, it is there to let and maintain property to retail. So that is why I focus on the FCF the current assets can generate under normal circumstances instead of focusing on the speculative value of the assets in a hypothetical transaction at some small time-interval, especially if this value changes every half year. Thirdly, the reason for buying it is based on my believe that the larger part of WHA is underappreciated in such a measure that the company as a whole is undervalued. It is just not readily visible from WHA's 100% consolidation of the BE ops. More specifically, the FCF from NL and FR ops (75% of the total FCF) are somehow capitalized at only half the capitalization of the BE ops, as if the cash flow are expected to be cut in half or so anytime soon in order to end up with a comparable valuation. I deem this extremely unlikely. Finally, I would not feel comfortable buying some security of which "it is generally known to be the better pick", i.e. in this case some non-retail REIT as "everyone knows retail is dying or challenged". The price has already conformed to this opinion: increased. Popularity and undervaluation are rarely found in the same bed. Talking about beds. Being able to sleep well at night it good for both of us. Good night! Nya P.S. Could you tell me more about your "melting ice cubes" encounters?