market folly

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Evan Vanderveer of Vanshap Capital who pitched a long of Keck Seng Investments and long Fleetwood Corp.


Evan Vanderveer's Sohn Canada Presentation

Co-runs $45m AUM with a focus on global deep value investing.

Pitched LONG Keck Seng Investments, a real estate company, with property holdings around the world. Currently, a HKD $3B market cap and owns assets such as W hotel in San Francisco (15% cap rate purchase), Owns 7 different residential and 3 commercial buildings in Macau and is in the process of buying the Sofitel Hotel in New York (paying 5% cap rate). It is low levered world class real estate property, trades at ~70% of tangible book, ~10% FCF at these levels. About 30% of estimated NAV using market rates. Even if they decrease the value of the assets by 40%, you get a double from the current stock price.

Some potential catalysts include turning the W Hotel into a REIT, continuing to divest Macau real estate, initiating capital returns to shareholders. The company has very large insider ownership, which makes it quite illiquid. The company has doubled FCF per share last 3 years while continuing to make smart acquisitions.


Next, pitched LONG Fleetwood Corporation, an Australian manufactured accommodation company (Makes RV's and such). Brand names are Camec, Coromal/Windsor and it’s currently trading ~70% of tangible book value and 8x 2015 EPS. Believes it has significant underlying earnings power, and half the current is associated with government backed cash flow stream from Osprey (subsidized housing).

EBIT has come way down for a few reasons, causing Net Debt-EBITDA to creep up to 2-3x. Camec has been hurt by foreign price competition, particularly from China and Asia in general. They have also worked to restructure Coromal/Windsor brands. If the company can reap the benefits of a recovery and some cost cutting, can reach 0.45 EPS in 2015, price target at $4.5. (~65% upside from closing prices).

Be sure to check out the rest of the presentations from Capitalize For Kids Sohn Canada here.