Guest wellmont Posted November 17, 2016 Share Posted November 17, 2016 I get 19%discount. Calc? This might be interesting! There is quite a substantial discount to NAV as per 15 Nov. - 27,7%. Also worth noting investors will pay no incentive fees until NAV increases by almost 60%, and exceeds $26.37 per share (high water mark). Link to comment Share on other sites More sharing options...
Aurelius Posted November 17, 2016 Share Posted November 17, 2016 I was wrong. As per 15 Nov: https://www.pershingsquareholdings.com/company-reports/weekly-navs/ NAV was 17.12; price was 13.41. Discount = 21,7% Link to comment Share on other sites More sharing options...
Phaceliacapital Posted November 18, 2016 Share Posted November 18, 2016 Watch last 5 minutes for those contemplating PSH investment Link to comment Share on other sites More sharing options...
Aurelius Posted November 18, 2016 Share Posted November 18, 2016 Their latest conference call: https://www.pscmevents.com/qcc/ Their portfolio percentages are quite different than what dataroma presents. Link to comment Share on other sites More sharing options...
fareastwarriors Posted November 18, 2016 Share Posted November 18, 2016 Watch last 5 minutes for those contemplating PSH investment The VRX issue? Link to comment Share on other sites More sharing options...
rb Posted December 7, 2016 Share Posted December 7, 2016 Has anyone tried to arbitrage this thing? Link to comment Share on other sites More sharing options...
JBTC Posted December 8, 2016 Share Posted December 8, 2016 Has anyone tried to arbitrage this thing? No idea how to arbitrage, but I couldn't resist picking up a few 80-cent dollar bills. Below from PSH's 3Q letter - Pershing Square Holdings’ discount from NAV has increased substantially over the last eight months and was more than 20% as of November 30, 2016. As an investor’s return is a function both of underlying NAV performance and price versus NAV, we find the current discount unacceptable. We believe the discount is attributable to a number of factors which include our below-expectation performance, and recent capital flows out of the hedge fund industry. We are exploring potential steps to narrow the discount to NAV and expect to report back to investors as soon as we have decided our intended approach. Link to comment Share on other sites More sharing options...
rb Posted December 8, 2016 Share Posted December 8, 2016 You see I'm not too crazy about their holdings. Your statement implies that their holdings are fully valued. But what if you pick up a $1.00 bill for 1.12 instead of 1.40. That doesn't sound so appealing now does it? Link to comment Share on other sites More sharing options...
JBTC Posted December 8, 2016 Share Posted December 8, 2016 You see I'm not too crazy about their holdings. Your statement implies that their holdings are fully valued. But what if you pick up a $1.00 bill for 1.12 instead of 1.40. That doesn't sound so appealing now does it? Thanks for the insight. I do also like their holdings. Not everyone but generally. Link to comment Share on other sites More sharing options...
giofranchi Posted January 10, 2017 Author Share Posted January 10, 2017 I have opened a new position in PSH. I think there are two differences from the time I first opened (and later closed at a small loss) a position in the company: 1) First of all, and most important, Bill Ackman has just suffered his worst performance in 13 years. And he should be a much humbler investor than he was a couple of years ago. If it is not so, my thesis is wrong and I'll sell again. 2) Discount to NAV is meaningful (15%), while NAV has increased for the last 3 quarters: it seems that bad performance has ended. If truly so, it should be just a matter of time before the gap between share price and NAV gets closed. We will see! Cheers, Gio Link to comment Share on other sites More sharing options...
Mephistopheles Posted January 10, 2017 Share Posted January 10, 2017 I'm not familiar with valuing investment managers, but is a small amount of that discount warranted due to the management/performance fees? In other words, would nav be slightly above fair value, assuming the holdings are fairly valued? Link to comment Share on other sites More sharing options...
giofranchi Posted January 10, 2017 Author Share Posted January 10, 2017 I'm not familiar with valuing investment managers, but is a small amount of that discount warranted due to the management/performance fees? In other words, would nav be slightly above fair value, assuming the holdings are fairly valued? I am not sure. But, if you take a look at Personal Assets Trust latest Quarterly Report (in attachment), you see their share price is sligthly higher than NAV. (And they do not enjoy Ackman's track record, which even after the VRX debacle is still a 15% compounded annual for the last 13 years, a cumulative 500%). Cheers, Gio82.pdf Link to comment Share on other sites More sharing options...
petec Posted January 10, 2017 Share Posted January 10, 2017 That's true Gio but I think Personal Assets has a discount control mechanism whereby they buy below NAV and issue above. Several UK investment trusts have this. Some that don't, e.g. Caledonia, trade at significant discounts (20% in that case but most are nearer 10%). I would argue against having a discount for management costs simply because open-ended fund structures trade at par yet they still charge a fee, and suffer structural disadvantages (the capital isn't permanent, they can't lever, etc.). The more pertinent argument for a discount, I think, is the liquidity or otherwise of the underlying. For example Caledonia's discount is high because it does a lot of private equity so the liquidity is low and you have to trust management's valuations. Pete PS The other reason for Personal's low discount is that it is so conservatively invested! As is Capital Gearing Trust which also has a good record. Link to comment Share on other sites More sharing options...
writser Posted January 10, 2017 Share Posted January 10, 2017 I'm not familiar with valuing investment managers, but is a small amount of that discount warranted due to the management/performance fees? In other words, would nav be slightly above fair value, assuming the holdings are fairly valued? I am not sure. But, if you take a look at Personal Assets Trust latest Quarterly Report (in attachment), you see their share price is sligthly higher than NAV. (And they do not enjoy Ackman's track record, which even after the VRX debacle is still a 15% compounded annual for the last 13 years, a cumulative 500%). Cheers, Gio They also do not enjoy Ackman's fee record, which even after the VRX debacle is still 1.5% + 16%. Link to comment Share on other sites More sharing options...
giofranchi Posted January 10, 2017 Author Share Posted January 10, 2017 Thank you Pete, actually you can see on their site how share price has compared to NAV until the first half of 2015, when sentiment was not so negative yet: the average discount had been around 7-8%, with some weeks in which the disocunt had shrank to 3-4%. Anyway, I agree: it is not really the discount to NAV that matters. Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted January 10, 2017 Author Share Posted January 10, 2017 They also do not enjoy Ackman's fee record, which even after the VRX debacle is still 1.5% + 16%. True. But investors won't pay incentive fees until NAV exceeds $26.37 per share. Cheers, Gio Link to comment Share on other sites More sharing options...
Mephistopheles Posted January 10, 2017 Share Posted January 10, 2017 I'm not familiar with valuing investment managers, but is a small amount of that discount warranted due to the management/performance fees? In other words, would nav be slightly above fair value, assuming the holdings are fairly valued? I am not sure. But, if you take a look at Personal Assets Trust latest Quarterly Report (in attachment), you see their share price is sligthly higher than NAV. (And they do not enjoy Ackman's track record, which even after the VRX debacle is still a 15% compounded annual for the last 13 years, a cumulative 500%). Cheers, Gio I think any assessment of Ackman's track record should include Gotham. Any info available on the combined returns of both funds? Wouldn't be surprised if it trails the market after fees. Link to comment Share on other sites More sharing options...
giofranchi Posted January 10, 2017 Author Share Posted January 10, 2017 I'm not familiar with valuing investment managers, but is a small amount of that discount warranted due to the management/performance fees? In other words, would nav be slightly above fair value, assuming the holdings are fairly valued? I am not sure. But, if you take a look at Personal Assets Trust latest Quarterly Report (in attachment), you see their share price is sligthly higher than NAV. (And they do not enjoy Ackman's track record, which even after the VRX debacle is still a 15% compounded annual for the last 13 years, a cumulative 500%). Cheers, Gio I think any assessment of Ackman's track record should include Gotham. Any info available on the combined returns of both funds? Wouldn't be surprised if it trails the market after fees. True. But I didn't mention Ackman's track record as a reason why I think an investment in PSH today might turn out better than my previous investment a couple of years ago. Basically, I think then was a time of great optimism (therefore a smaller discount share price to NAV) and Ackman was too self confident (therefore more risk), now instead is a period of great pessimism (therefore a larger discount share price to NAV) and (I hope) Ackman might be more prudent (therefore less risk). If this is not the case, as I have said, I am wrong and I'll sell again. Cheers, Gio Link to comment Share on other sites More sharing options...
awindenberger Posted January 11, 2017 Share Posted January 11, 2017 I've been thinking the same Gio. Assuming Ackman delivers his usual returns going forward, the discount to NAV will almost certainly shrink. Link to comment Share on other sites More sharing options...
DeepSouth Posted January 11, 2017 Share Posted January 11, 2017 I've been thinking the same Gio. Assuming Ackman delivers his usual returns going forward, the discount to NAV will almost certainly shrink. How much of Ackman's cumulative return in Pershing Squared is from GGP? ASs to learning his lesson, Gotham Golf and Target didn't teach him a lesson, I don't see why Valeant will. Read Confidence Game to get a better view of his blinding hubris. Link to comment Share on other sites More sharing options...
arcube Posted January 11, 2017 Share Posted January 11, 2017 I've been thinking the same Gio. Assuming Ackman delivers his usual returns going forward, the discount to NAV will almost certainly shrink. How much of Ackman's cumulative return in Pershing Squared is from GGP? ASs to learning his lesson, Gotham Golf and Target didn't teach him a lesson, I don't see why Valeant will. Read Confidence Game to get a better view of his blinding hubris. +1. Also let's not forget JC Penney. Link to comment Share on other sites More sharing options...
giofranchi Posted January 11, 2017 Author Share Posted January 11, 2017 I've been thinking the same Gio. Assuming Ackman delivers his usual returns going forward, the discount to NAV will almost certainly shrink. How much of Ackman's cumulative return in Pershing Squared is from GGP? ASs to learning his lesson, Gotham Golf and Target didn't teach him a lesson, I don't see why Valeant will. Read Confidence Game to get a better view of his blinding hubris. +1. Also let's not forget JC Penney. This imo is not completely true. What I like about Ackman is his entrepreneurial bent: he tries to add something useful to the companies he invest in and to create value. In business not everything you try turns out right. You might even have good ideas and yet fail to achieve good results. That's imo just an unavoidable part of the game. Target and JC Penney have taught Ackman that retail is very hard and therefore to stay away from it, even if you think you might be able to come up and implement good strategies... Much more than Lampert has learnt, it seems... What matters the most imo is that he never lost a large % until VRX: precisely because in business you never can be sure, you should not be too confident to bet the future of your company on a single endeavor. Ackman instead has acted too sure of himself with Valeant (bet too much at a price that clearly was too high), probably because the Allergan trade had turned so spectacularly well for him the year before. Something bad happened with VRX (as we all know), and he was severely punished for his arrogance. With this lesson, I hope, Ackman might be a humbler and more prudent investor going forward. Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted January 11, 2017 Author Share Posted January 11, 2017 Anyway, I want to be clear that I agree Ackman has a lot to prove. It is possible that nothing has really changed... If I see him betting too heavily on a single investment again, I will surely sell. Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted January 20, 2017 Author Share Posted January 20, 2017 Does it make any sense for KHC to buy MDLZ? Does it make any sense for QSR to buy CMG? Which of the two has the highest chance to materialize? Cheers, Gio Link to comment Share on other sites More sharing options...
Phaceliacapital Posted January 20, 2017 Share Posted January 20, 2017 KHC MDLZ definitely makes sense. Question to Gio, why not Bollore instead of PSH? Link to comment Share on other sites More sharing options...
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