We're posting up notes from the 2013 Value Investing Congress in New York. Next up are Evan Vanderveer and David Shapiro of Vanshap Capital. Their presentation was entitled "Global Below Book Value Investing" and pitched EGI Financial Eurobank Properties.
Evan Vanderveer & David Shapiro's Value Investing Congress Presentation
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Run $37M, have 13% of
their fund in two ideas.
EGI Financial
(8% of their fund) Based in Ontario,
Canada. Trades on TSX, stock is
EFH, $145M market cap. P&C
company. Lost 50% of income in
diversified operations. Kind of a
mess, but they say value investors are working with them.
Eurobank Properties
(5% of their fund). Trades in Europe, symbol EURO.
Largest Greek REIC, trading at 63% of book value, 12% implied rental
yield.
Catalyst is company can use
excess balance sheet capacity to buy Greek real estate assets at a
discount. Reason for opportunity:
Uncertainty surrounding Greek economy.
Mainly office buildings,
fairly blue chip tenant base.
Eurobank is 37% of their tenant base, however. Long leases, average is over 10 years, and linked to
CPI. Greek economy mirrors the US
in the Great Depression. Hard on office market; vacancy rates have doubled,
rents flat to down. Good news is no new
construction for 5 years.
Based on replacement
value, stock could double. Clean balance sheet,
strong management, high quality properties with blue chip tenants, and trades
at a discount.
Be sure to check out the other presentations from the New York VIC here.
