Long SOHU Short SOGO

I was going to post this idea Friday morning, but then a Reuters scoop significantly affected the share prices. The trade is now slightly less attractive, but readers may still find the commentary useful The current market price of SOGO implies a high likelihood that its $9/ADS acquisition by Tencent will be successful while the … Continue reading Long SOHU Short SOGO

Jardine Matheson To Simplify Corporate Structure Through Privatization of Jardine Strategic

Elimination of the dual holding company structure will improve governance and simplify valuation analysis (company announcement). The discounted price will be significantly accretive for Net Asset Value and Earnings of Jardine Matheson. Here are excerpts from notes about the Jardine Group that I shared privately last fall. I am not sharing a valuation analysis so … Continue reading Jardine Matheson To Simplify Corporate Structure Through Privatization of Jardine Strategic

H&R REIT: Spin-Outs To Unlock Value

H&R recognizes that its diversified business model is out of favor and that higher valuation can be delivered through "pure play" entitiesH&R disclosed intensification plans for several prime downtown Toronto sites and a huge site in VancouverVery low yields on H&R's unsecured debt suggest the AFFO yield of H&R units is far too high Canadian … Continue reading H&R REIT: Spin-Outs To Unlock Value

Brookfield Property Buyout: Fair Value Would be $20

Brookfield Asset Management (BAM) offered to buy the publicly held units of Brookfield Property Partners (BPY) for $16.50/unit (LINK) I organized my thoughts to assess how much upside might remain to a definitive agreement. The price is low by most metrics: 38% discount to IFRS Net Asset Value per share of $26.80. BAM's own quarterly … Continue reading Brookfield Property Buyout: Fair Value Would be $20

Canny Insiders Buying Canadian REITs During Tax Loss Season

Canadian REITs underperformed the S&P TSX Composite in 2020 (-10% vs +6%)Canadian capital gains tax is assessed on a settlement date basis so December 29 was the last day to realize losses in 2020REITs with poor YTD returns and notable recent insider buying include Cominar, Riocan, First Capital, Allied Properties, Brookfield, and Artis Real estate … Continue reading Canny Insiders Buying Canadian REITs During Tax Loss Season

Commercial Mortgage REITs Demonstrated Surprising Resilience in 2020

Average book value return of +1% in 9M20Avoided disorderly portfolio liquidation. Flexibility with borrowers and lenders preserved valueSome bargains remain with 5 CM REITs at discounts of over 20% to 9/30 book valueA longer recession would be a greater challenge to these business models Commercial mortgage REITs have passed through the COVID crisis without large … Continue reading Commercial Mortgage REITs Demonstrated Surprising Resilience in 2020

Residential Mortgage REITs: Poor Total Return, High Volatility, and Uncertain Dividends … As Usual

Residential mortgage securities performed well this year due to massive government support and a strong housing market in most of the country.Residential mortgage REITs produced an average year-to-date total NAV return of -25% to 9/30 and a ytd total price return of -28% to 12/23.Deeply discounted valuations created short-term opportunities earlier this year, but the … Continue reading Residential Mortgage REITs: Poor Total Return, High Volatility, and Uncertain Dividends … As Usual

H&R REIT: Fading Risk Should Be Reflected In A Higher Price

Unit Price has sharply underperformed the sector since the onset of COVID Trading at a 44% discount to IFRS Net Asset Value (C$22.11) and less than 9X 2020 AFFO which has been temporarily depressed by COVIDRetail and energy tenants are performing better than feared H&R REIT (TSX:HR/UN)(HRUFF) units have fallen sharply this year due to … Continue reading H&R REIT: Fading Risk Should Be Reflected In A Higher Price

Artis REIT: Break-Up Will Deliver Value, But Who Will Wield The Hammer?

Artis delivered strong 3Q20 operating results with high rent collection and rising FFOCOVID impact has been limited due to portfolio of industrial assets, secondary office markets, and essential retailActivist Sandpiper Group launched a proxy fight to replace 5 of the 7 directorsThe proposed Retail spinoff was postponedOut-of-favor diversified business model has suppressed the market value. … Continue reading Artis REIT: Break-Up Will Deliver Value, But Who Will Wield The Hammer?

Nam Tai Property: Complicated Plots

Nam Tai Property (NTP) has generated a 10 year return of about zero despite consistently bullish online commentary I resisted buying NTP due to flaws in the bullish arguments, but took a fresh look due to recent involvement of an activist shareholder, ISZO Capital. Here's a brief recap of some underappreciated aspects of the story … Continue reading Nam Tai Property: Complicated Plots