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EXO.MI - EXOR

Sportgamma

By Sportgamma
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tombgrt Newbie

tombgrt

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Guys,

 

I spend some time revisiting this file with updated valuations, I made a spreadsheet if you want to toy around with valuations:

 

https://docs.google.com/spreadsheets/d/12toIDTeWXj4G_1Bvg8GDZEwIYtyB1DHmDhGjStAIQtA/edit?usp=sharing

 

I arrived at a +/- 20% holding discount.

 

If you assume the IPO value for CNH (9) and fair value for FCA of 11 you get a 40% discount.

 

Thanks phaceliacapital!

 

Where Does the value for juventus come from? Is it me or does that seem low?

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kab60 Newbie

kab60

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One thing he doesn't look into is Partner Re's track record. If you look at the combined ratio it is lower than berkshire and has been below 100% for awhile.

Not saying I agree with everything, but I do think that SA piece is overly optimistic. What I struggle with re Exor is the acquisition of Partner RE. Buffett himself doesn't expect as high a return going forward as in the past, and Exor made an entrance via a high profile, public bidding contest. I find it hard to believe they got a bargain. Then again, the stock price might reflect that today.

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muscleman Newbie

muscleman

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One thing he doesn't look into is Partner Re's track record. If you look at the combined ratio it is lower than berkshire and has been below 100% for awhile.

 

Where did you get that data? Can you please share with me?

http://seekingalpha.com/article/3974842-exor-s-p-lollapalooza

 

What I see here in exhibit 3 is that Berkshire's combined ratio has been much better than PartnerRE since 2004.

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Jurgis Newbie

Jurgis

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IMO, both bullish and bearish arguments make sense.

 

Bullish: SoP, cheap prices on parts (FCAU, Ferrari?, CNH?), good (great?) management.

Neutral: Partner Re - it could be a good sub to own though possibly not as great as expectations run.

Bearish: Possibly overpaid for Partner Re, possibly bad decision to sell Cushman and Wakefield, somewhat crappy subs (FCAU, CNH).

 

One thing to keep in mind is that at current stock market prices, there's not that much good companies that Exor could buy. Buffett might be overpaying too when buying at this point in time (PCP). OTOH, Exor is smaller and is Europe based, so they possibly could have bought some better quality companies in Europe rather than going for Partner Re.

 

Longer term, it would be good if they could ditch FCAU (and possibly CNH) at great price, but this may not happen for both business reasons and the historical reasons. Same with Juventus - though that's way smaller part.

 

That's why I don't have a huge position in Exor. I have a moderate sized position and may increase it more if I get more comfortable with their business plans and execution.

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John Hjorth Newbie

John Hjorth

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Posted by Sanjeev & NBL0303 in the FCAU topic in the Investment Ideas forum, migrating it to here, not to clog up the FCAU topic:

 

... I think their view is that buying back shares in a low ROIC biz (even if its improving) is not as good as dividends or investing in mergers which improve the economics of the biz. ...

 

If you study the controlling FCAU shareholder EXOR, again controlled by the Agnelli family holding company since its formation by the merger of IFI and IFIL some years ago, there is to me no doubt, that the long term plan for EXOR is to expand in other areas than FCAU, and EXOR therefore needs the dividends to do that, and to pay down EXOR debt at holding company level.

 

Interesting point. Do you think this means that Exor/Agnelli family would agree to sell the entire company or the core company with MM spun-off?

 

Almost guaranteed that FCAU is sold at some point by the Agnelli family...especially with Marchionne passing, instead of sitting as Chairman.  But they will not give it away...no need, FCAU financially is one of the most solid auto companies in the world now.  Strategically, there should be at least 3-4 major parties interested in a deal to continue consolidation of the industry.  Cheers!

 

Naturally, I don't know the answer to this question going forward, either.

 

- - - o 0 o - - -

 

However, a few interim comments here, though. I'll elaborate further in this topic later.

 

My family and I own a lot of stuff more or less similar to EXOR [ref. my personal overall perception] - I'll mention them all here:

  • Berkshire Hathaway Inc.
  • Markel Corp.
  • Fairfax Financial Holdings
  • Brookfield Asset Management Inc.
  • Schouw & Co. A/S
  • Investor AB
  • L E Lundbergföretagen AB
  • Industrivärden AB

They are all different beasts, in several dimensions. The common denominator for them all is, that there is no way to make projections going forward for any of them, with regard to how they will appear in 1 year, 3 years, 5 years, or even 10 years from now. Exactly the same applies in the rear mirror for 1 year, 3 years, 5 years etc. They are all sprawling conglomerates [some more, some less].

 

It's basically all about capital allocation, to grow forward, for the benefit of the shareholders.

 

Exactly the same applies to EXOR.

 

So, if you try just to do some SOTP analysis for EXOR, you might get it right, or perhaps in worst case get totally wrong. Your SOTP has to be supported by an analysis how HQ/Holding Co operates, and by which principles - principles to which you personally have to concur [at least to some extent], otherwise the company is not the right investment for you.

 

- - - o 0 o - - -

 

EXOR looks lop-sided right now. Somehow a weirdo, if you ask me. The implication is it's cheap - "on paper" [EXOR "on paper"] - it's even "extraordinary" cheap, compared to similar conglomerates, if you try to adjust for that FCAU seems cheap at recent market value.

 

- - - o 0 o - - -

 

More to come along the way.

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TwoCitiesCapital Newbie

TwoCitiesCapital

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I find it interesting that FCA opted for the extraordinary divided and subsequently Exor accelerates repurchases of Exor stock:

- EXOR | FCA Monetization and Share Repurchases

 

The discount to NAV is now around 35%:

- Exor Discount to NAV

 

Glad to see this. I was expecting that they'd do that in the event Fiat was sold. Glad to see they're using the liquidity event to close that valuation gap.

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mcliu Newbie

mcliu

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Thank you for sharing, Gísli,

 

It's also a very nice write-up you have done on EXOR & FCAU.

 

Thanks, John. Glad you like it.

 

The sheet fetches live pricing of the publicly traded entities, so changes in the discount are somewhat captured.

 

Nice spreadsheet. I noticed you have PartnerRe marked at $7,950, but on the EXOR H1 report, it's marked at $7,590. Is that a typo, or did you mark it higher on purpose?

 

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Spekulatius Newbie

Spekulatius

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Exor looks like an early version of Berkshire to me. It is no  coincidence that they acquired an insurance company (Partner RE). The spinoffs and special dividends from FCAU are driven by Exor’s desire to recycle some cash into higher quality assets or purchase back stock at a discount to fair value.

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John Hjorth Newbie

John Hjorth

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Thank you for sharing, Gísli,

 

Good capital allocation by Mr. Elkann & team.

 

Exor looks like an early version of Berkshire to me. It is no coincidence that they acquired an insurance company (Partner RE). The spinoffs and special dividends from FCAU are driven by Exor’s desire to recycle some cash into higher quality assets or purchase back stock at a discount to fair value.

 

Yes, Spekulatius,

 

Perhaps somebody thinks it looks a bit like a weirdo right now, and that some of the subs perhaps may lack quality, but I like them. Personally, I think CNH Industrial by many are underrated.

 

Also, EXOR is "double cheap", because FCAU is cheap, and by EXOR in NAV included at market price. [A bit similar to the relationship between BOL.PA and ODET.PA.] [Please see Gísli's nice spreadsheet embedded in the blog post by Gísli, in this topic mentioned by Gísli earlier.]

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Spekulatius Newbie

Spekulatius

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Thank you for sharing, Gísli,

 

Good capital allocation by Mr. Elkann & team.

 

Exor looks like an early version of Berkshire to me. It is no coincidence that they acquired an insurance company (Partner RE). The spinoffs and special dividends from FCAU are driven by Exor’s desire to recycle some cash into higher quality assets or purchase back stock at a discount to fair value.

 

Yes, Spekulatius,

 

Perhaps somebody thinks it looks a bit like a weirdo right now, and that some of the subs perhaps may lack quality, but I like them. Personally, I think CNH Industrial by many are underrated.

 

Also, EXOR is "double cheap", because FCAU is cheap, and by EXOR in NAV included at market price. [A bit similar to the relationship between BOL.PA and ODET.PA.] [Please see Gísli's nice spreadsheet embedded in the blog post by Gísli, in this topic mentioned by Gísli earlier.]

 

Well, Exor has mainly grown from Cash and spinoffs crated out of Fiat. The Agnelli know better than anyone else that automobile is a crummy business in the long run and Fiat was at the brink of bankruptcy at least 3 times in recent history. Now, with the Spinoff, they insulated themselves somewhat from Fiat and have now several pillars to stand on. I am guessing they Exor is as much a wealth preservation than a wealth generation vehicle and diversification is important to the owners. I agree that CNHI is underrated, it used to be a real crappy subscale business and It’s now at least Ok business and may end up getting merged eventually.

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Sportgamma Newbie

Sportgamma

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Board aproves 2018 results:

 

https://www.exor.com/home/Media/01_Comunicati-stampa/2016/31_CS_27032019.html

 

Constitution of the Partners Council

 

On 24 May 2018 EXOR N.V. announced the constitution of a Partners Council chaired by former UK Chancellor of the Exchequer, George Osborne CH.

 

The initial membership of the Partners Council is: Michael Larson - Chief Investment Officer of BMGI; Jorge Paulo Lemann - Co-Founder of 3G Capital; George Osborne CH - Editor of the London Evening Standard; Nassef Sawiris - CEO of OCI; Rob Speyer - President and CEO of Tishman Speyer; Joseph C. Tsai - Executive Vice Chairman of Alibaba Group; Mike Volpi - Co-Founder of Index Ventures; Ruth Wertheimer – Founder, Owner and Chairwoman of 7- Main.

 

The EXOR Partners Council brings together a group of highly successful business leaders representing a wide range of companies, nationalities, backgrounds and experiences.

 

This group will bring additional expertise and counsel into EXOR, which will be particularly valuable, for example, when exploring new business opportunities.

 

 

Constitution of EXOR Seeds

 

In the first half of 2018 EXOR Group promoted EXOR Seeds, a new global venture initiative through which it plans to invest $100 million in startups, highly diversified by sector and geography, with a long-term investment outlook.

 

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John Hjorth Newbie

John Hjorth

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Fairly much in line with the content of the last post by Gísli here about EXOR:

 

Financial Times - Rachel Sanderson [March 29th 2019] : John Elkann, Fiat’s dynastic survivalist - The scion of Italy’s glamorous automotive family is using his global connections to branch out.

 

- - - o 0 o - - -

 

[Yeaayy! - Today I found out how to type "Gísli" the correct way [without using cut and paste from somewhere else] ... [ : - D ]]

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