market folly

We're posting notes from the London Value Investor Conference 2016.  Next up is Andrew Hollingworth of Holland Advisors who pitched long Exor.


Andrew Hollingworth's London Value Investor Conference Presentation

Franchise investing has beaten deep value handily in recent years. Going forward, the franchise investors’ margin of safety has gone. Powerful compounding franchises will not do as well in the future because they are starting from high valuations.

There is value today in four places:

- Hated sectors like US banks and autos
- Blood in the streets value like Greece, China, and Japan
- Beat the fade franchises like Apple, Sports Direct, and Disney
- The complicated parent like Jardine Strategic and Exor


Investment idea: Exor 

Exor is a family dominated Italian investment holding company which is a major shareholder in Fiat and Cushman and Wakefield. Exor is sometimes seen as an Italian conglomerate run by a playboy son, John Elkann. Elkann has great drive and hunger for success. He is simplifying the company and trying to copy the Berkshire, Markel, Fairfax model. Exor’s takeover of Partner Re last year gives it float to invest. In terms of a sum of the parts valuation based on listed prices Exor trades at a 25% discount. It is currently trading on a PE of 2 or even less.


Be sure to check out the rest of the presentations from the London Value Investor Conference.