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Where's the value?


berkshire101
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Is anyone finding value out there?  There's always good bargains if you look hard enough. 

 

However, I'm finding it difficult to find bargains in the Growth At Reasonable Price section.  I mainly see energy and materials in the biggest losers category regularly and those are outside my area of expertise. 

 

 

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I got tired typing "maybe", so all below are "maybe":

 

BRK, FFH, EXOSF, BAM, BAC, JPM, AAPL, Liberties, CXRX, PSH ( I just had to add that for controversy  8) )

 

Yeah, but not tons.

Some of these were 10-20% cheaper a month ago.

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FCAU, RACE, DTEA, BIDU, CXRX, CRH.TO, AGU

 

That's my portfolio right now. All of them are GARP-y. Highest quality businesses are RACE, BIDU and DTEA. There is good value in healthcare if you can stomach the volatility. Acquisitive companies, especially those with leverage, have gotten killed, some of them unfairly. China was also on sale, still probably is, but I got the company I wanted (BIDU) so not really looking there any more. Decent value in Canada as well, I'm looking at companies like TFI, BAD, SXP (haven't done much work on them yet, but have them set aside to look at).

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Here is my valuation watchlist of dividend stocks, i am sure there are plenty of errors in it but it has worked for me. Perhaps there are some ideas for you.

 

https://docs.google.com/spreadsheets/d/1HjdCBGkRsS83oAYMs0MmV_oPkm0nv7PtPnAZLy6DdTk/edit?usp=sharing

 

The important column is FRoR 5Y which is basically the expected annual CAGR for the stock assuming it trades back to the average/fair multiple and growths by the assumed growth rate.

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On the small- to micro-cap side of things, here are a few that may interest you:

 

Texhong Textile (HK:2678)

IDW Media (IDWM)

Advant-E (ADVC)

Judges Scientific (LN:JDG)

Quorum Information Systems (QIS)

Singapore Shipping (SGX:S19)

DHX Media (DHXM)

Sirius XM Canada (XSR)

Videocon (VDTH) [look carefully at the corporate governance for this one]

 

 

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I run a pretty concentrated portfolio with just five stocks and think they're all good value: DCI (Canada), BCOR (US), RLGT (US), WPT (US) and VDTH (ADR, India). Optically none of them are cheap, and they don't screen well, but all have high ROIC and are growing (DCI less so, RLGT via acquisitions) so it's not cigar butt investing but what I consider very cheap (and growing) cashflows more so than tangible assets and low PB.

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I got tired typing "maybe", so all below are "maybe":

 

BRK, FFH, EXOSF, BAM, BAC, JPM, AAPL, Liberties, CXRX, PSH ( I just had to add that for controversy  8) )

 

Yeah, but not tons.

Some of these were 10-20% cheaper a month ago.

 

I think PSH may be a good one here...you basically get VRX as a free option.

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I think it depends on whether you feel comfortable with PSH's other holdings

I just don't think they are particularly cheap (correct me if I am wrong)

The discount to NAV is larger than ever, but I am not sure if it's justified

 

I got tired typing "maybe", so all below are "maybe":

 

BRK, FFH, EXOSF, BAM, BAC, JPM, AAPL, Liberties, CXRX, PSH ( I just had to add that for controversy  8) )

 

Yeah, but not tons.

Some of these were 10-20% cheaper a month ago.

 

I think PSH may be a good one here...you basically get VRX as a free option.

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S Korea (esp preferreds), HK Real Estate hold cos & brokerage, Greece, Japan media, Asian consumer products, small cap O & G, NNN REITs for income & some media content firms like Viacom.

 

Packer

 

Packer, which HK real estate companies are your favorites right now?  Any views on Keck Seng?

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S Korea (esp preferreds), HK Real Estate hold cos & brokerage, Greece, Japan media, Asian consumer products, small cap O & G, NNN REITs for income & some media content firms like Viacom.

 

Packer

 

Packer, which HK real estate companies are your favorites right now?  Any views on Keck Seng?

 

You likely know but CKI.TO owns a lot of Keck Seng.

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S Korea (esp preferreds), HK Real Estate hold cos & brokerage, Greece, Japan media, Asian consumer products, small cap O & G, NNN REITs for income & some media content firms like Viacom.

 

Packer

 

Packer, which HK real estate companies are your favorites right now?  Any views on Keck Seng?

 

You likely know but CKI.TO owns a lot of Keck Seng.

 

Yep, but at current prices I'd rather own (and do own) Keck Seng directly rather than through Clarke.  The undervaluation of Keck Seng is hard for me to understand, even given what appears to be an overpay for the NY hotel, but I'm always looking for reasons why I'm wrong.

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Hi, Packer:

 

When you say "Japan Media" you mean sth like telecom?

 

/plato

 

S Korea (esp preferreds), HK Real Estate hold cos & brokerage, Greece, Japan media, Asian consumer products, small cap O & G, NNN REITs for income & some media content firms like Viacom.

 

Packer

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I have looked at Keck Seng but from what I saw most of the undervaluation versus other HK RE hold cos was due to expected property sales in Macau.  If the properties revert back to 2012 pricing then I have a 33 cent dollar or about an NAV of HK$17/share, which would put it in the range of a buy.  However, if the BV is used, the NAV is closer to HK$14/share, a cheap but not a screaming buy.  The ones I like that have larger discounts are Shun Ho, Asia Standard and Hopewell without the Macau Resi uncertainty.

 

Packer

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S Korea (esp preferreds), HK Real Estate hold cos & brokerage, Greece, Japan media, Asian consumer products, small cap O & G, NNN REITs for income & some media content firms like Viacom.

 

Packer

 

Packer - what are your favorite REITs here? Any thought on some of the more popular names in the value community (eg SRG and NRF)?

 

Also - I think Viacom is pretty risk given the execution needed to turn that business around. Think DISCA is a better R/R.

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I have looked at Keck Seng but from what I saw most of the undervaluation versus other HK RE hold cos was due to expected property sales in Macau.  If the properties revert back to 2012 pricing then I have a 33 cent dollar or about an NAV of HK$17/share, which would put it in the range of a buy.  However, if the BV is used, the NAV is closer to HK$14/share, a cheap but not a screaming buy.  The ones I like that have larger discounts are Shun Ho, Asia Standard and Hopewell without the Macau Resi uncertainty.

 

Packer

 

Hi Packer,

 

Many of those Asian names do look cheap, but my impression is they often remain cheap forever. Does your own experience suggest otherwise, or is there other evidence that suggests buying these cheap stocks does work?

 

Of the names you mentioned I have only heard of Hopewell. It has not moved much for 10 years.

 

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I got tired typing "maybe", so all below are "maybe":

 

BRK, FFH, EXOSF, BAM, BAC, JPM, AAPL, Liberties, CXRX, PSH ( I just had to add that for controversy  8) )

 

Yeah, but not tons.

Some of these were 10-20% cheaper a month ago.

 

Jurgis,

 

Would you mind sharing your thoughts on why BAM may be cheap?

 

Thanks.

 

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Jurgis,

 

Would you mind sharing your thoughts on why BAM may be cheap?

 

Thanks.

 

Reasonably priced might be better description. I did not do a deep dive, not sure I could with their subs, investments, and corporate structure. Surface ratios look OK: P/E, P/B, P/S, but they are perhaps not great for evaluating company like BAM. Presumably good/great management.

 

Cons:

Not cheap based on AUM?

Cycle? RE asset allocation high? May be lower in the future?

This week's Barron's questions some of their accounting. FWIW.

Another risk is that they are quite big now based on AUM.

 

In summary, it might be a good company at OK price for some exposure to RE and alternative asset management if you trust the management. I won't pound on the table about it though, since it's rather complex.

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Jurgis,

 

Would you mind sharing your thoughts on why BAM may be cheap?

 

Thanks.

 

Reasonably priced might be better description. I did not do a deep dive, not sure I could with their subs, investments, and corporate structure. Surface ratios look OK: P/E, P/B, P/S, but they are perhaps not great for evaluating company like BAM. Presumably good/great management.

 

Cons:

Not cheap based on AUM?

Cycle? RE asset allocation high? May be lower in the future?

This week's Barron's questions some of their accounting. FWIW.

Another risk is that they are quite big now based on AUM.

 

In summary, it might be a good company at OK price for some exposure to RE and alternative asset management if you trust the management. I won't pound on the table about it though, since it's rather complex.

 

Don't want to derail this thread, but I believe there was a Barron's article on BAM that talked about how they have some questionable accounting practices in terms of valuing assets. For instance, they kept a high valuation in a pipeline asset they bought when Kinder Morgan (their JV partner) wrote that asset down to zero. etc.

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Don't want to derail this thread, but I believe there was a Barron's article on BAM that talked about how they have some questionable accounting practices in terms of valuing assets. For instance, they kept a high valuation in a pipeline asset they bought when Kinder Morgan (their JV partner) wrote that asset down to zero. etc.

 

...

Cons:

...

This week's Barron's questions some of their accounting. FWIW.

 

Just sayin'  ;)

 

But, yeah, any further BAM discussion probably should go to BAM thread.

 

Peace.

 

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