TIPT - TipTree Inc.

[lemsinge]

TipTree Inc. is a holding company that has investments in specialty insurance, asset management, senior living and specialty finance.

Current Price: $6.65

Mkt. Cap: $190m

Tangible Book Value: 212m

P/E: 8.32

P/S: 0.34

P/B: 0.68

P/FCF: 6.81

EV/EBITDA*: 4.8x

 

It's a pretty small company with very little volume, no coverage and tricky to understand accounting due to its various holdings.

 

Very simple valuation gets me to about $8.80/share after dilution;

((Tangible BV + Depreciation of Real Estate + Net Market Value of Real Estate) / Diluted Shares) - ITM options

212 + 38.2 + (404.75-326.90) / 36.437 = $9 - 0.19 = ~$8.81/Share

 

The diluted shares outstanding include class b shares which are exchangeable for class A shares with partnership units. The net market value of real estate is what I projected to be an estimated value (12month forward NOI / 6% cap rate). The current options management owns from 2007 that will expire this year and are ITM. They have stated it will dilute BV by $0.19. TIPT also has a 1.5% dividend and share buyback program (6 mil in the last year).

 

Seems to be pretty ignored by the market on an intrinsic standpoint, let alone potential growth and a strong variety of businesses. TIPT Management is also not much of an activist in these companies and aim to provide long term risk adjusted returns and book value growth. They are happy to let the CEOs do their job.

 

*EV/EBITDA comes from adjusted numbers which can be explained more in-depth on the investor presentation. These are adjusted to not include asset specific debt (such as debt to leverage real estate holdings)