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EXO.MI - EXOR


Sportgamma

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  • 3 months later...

The P/V Podcast - Unlocking Value in European Conglomerates - The Price-to-Value Podcast with Southeastern Asset Management.

 

Podcast episode with a strong focus on EXOR and Mr. Elkann's work during the years at EXOR. To me, absolutely worth your time, if interested in EXOR - either just as an overall brush-up, or as an introduction & walk-you-through.

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You're welcome, WayWardCloud, & thank you!,

 

- - - o 0 o - - -

 

By the way, I have the Welltec financials for 2018. I uploaded the 2017 financials for Welltec in post #63. For some reason that I don't know, the size of the files of the financials for 2018 are pretty much bigger than the 2017 files, so I can't upload them here on CoBF.

 

For all fellow CoBF members, please feel free to PM me your e-mail address, if you're interested in the 2018 financials, and I will send them to you.

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  • 1 month later...

CNH Industrial Press Release [september 3rd 2019] : CNH Industrial Presents ‘Transform 2 Win’ Strategy for Stakeholder Value Creation at New York Investor Day.

 

Link to 2019 Capital Markets Day - Presentation Pack.

 

Plan for split in 2020 2021 of CNH Industrial in two separately listed companies : "On Highway" company and "Off Highway" company, by spin-off of "On Highway" company.

 

From an industrial point of view, this makes good sense to me. -This is so much an "EXOR-thing" to do! [ ; - ) ]

 

- - - o 0 o - - -

 

Edit : Correction of year for actual planned execution after reading EXOR Press Release.

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  • 2 months later...

Shocked that this company doesn't get more discussion here.

 

16% annualized for the past 5-years and still trades at a 30%-ish discount to it's NAV even using modest assumptions for it's private businesses.

 

Recent announcements regarding FCAU and CNH should be accretive to value in the near-term.

 

Further, their equity portfolio has to be knocking the ball out of the park this year. Their their two largest equity investments are Ocado (up 60% YTD) and Sibanye-Stillwater (up 245% YTD).

 

What does it take for this NAV gap to close to something more reasonable?

 

 

 

 

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Shocked that this company doesn't get more discussion here.

 

16% annualized for the past 5-years and still trades at a 30%-ish discount to it's NAV even using modest assumptions for it's private businesses.

 

Recent announcements regarding FCAU and CNH should be accretive to value in the near-term.

 

Further, their equity portfolio has to be knocking the ball out of the park this year. Their their two largest equity investments are Ocado (up 60% YTD) and Sibanye-Stillwater (up 245% YTD).

 

What does it take for this NAV gap to close to something more reasonable?

 

TwoCitiesCapital,

 

Perhaps Mr. Elkann just needs a haircut & some grease in his hair? [<- Please don't take it too seriously though. - I simply couldn't help it here.] [ : - ) ]

 

Mr. Elkann is [still] a fairly young man, and to me, it's actually incredible, what he has pulled off during his years at the steering wheel. Thrown into "the family game" at a fairly young age, now - at least to me - both an investor and an operator.

 

- - - o 0 o - - -

 

EXOR is to me an example of that "there is always something to do" for a value investor, no matter the market conditions. [ ; - ) ]

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  • 2 weeks later...

I wonder if anyone watched the investor day webcast (as i did)

 

Couple of points came across to me and a fair bit to like. 

 

- Accounting seems conservative

- They seem to have found ways to extract cash from their investees, even though FCAU, Partner RE, RACE and CNHI are bulk of their portfolio

 

For instance, they will be getting a substantial dividend when the FCA PSA merger takes place.  Looks like CNHI is being split to prepare for a sale of the truck business, though they did not confirm.  Which may lead to more funds.  I like the dividend and buyback policy.  One question asked was will they buy high quality businesses, or take controlling stakes in fair companies and work with them to improve their performance.  Essentially,  they said that they find better companies too expensive right now.  Given their track record of good exits, and their domain expertise in industrials, buying fixers may a good approach.  (Keep in mind they are usually the largest investors).  Also, i like that there is no sense of urgency to buy something, and they are thoughtful and calculated about it.  Overall, i felt good about the webcast.  Of course, everybody can talk like Buffett ;) , but at the end of the day it is the execution that matters. 

 

Any other thoughts?

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  • 3 months later...

I wonder if anyone watched the investor day webcast (as i did)

Essentially,  they said that they find better companies too expensive right now.

 

This might be about to change and they will be getting $9Billion from the PartnerRe sale by the end of this year + the FCA special dividend + creditworthiness

 

Things are starting to get pretty interesting, imo. Elkann is a Singleton, not a Buffett

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I wonder if anyone watched the investor day webcast (as i did)

Essentially,  they said that they find better companies too expensive right now.

 

This might be about to change and they will be getting $9Billion from the PartnerRe sale by the end of this year + the FCA special dividend + creditworthiness

 

Things are starting to get pretty interesting, imo. Elkann is a Singleton, not a Buffett

 

https://www.exor.com/press-releases/2020-03-03/exor-announces-memorandum-understanding-sale-partnerre-covea-9-billion

 

Nice! I saw the news that they were in talks, but hadn't seen the official announcement.

 

20% above the carrying value from 6/30/2019 which means those share repurchases were done at even larger discounts to book than previously thought.

 

I love this stock

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This might be about to change and they will be getting $9Billion from the PartnerRe sale by the end of this year + the FCA special dividend + creditworthiness

 

Things are starting to get pretty interesting, imo. Elkann is a Singleton, not a Buffett

 

Thanks for the write up Sportgamma, just one question, you write:

 

"When Exor receives cash distributions from their investments it creates a taxable event. This tax leakage should be factored into the price as it’s more expensive to hold these assets through Exor as it would be to hold them directly. "

 

Are you sure that this is correct, now they are incorporated in the Netherlands? My understanding was that they were now eligible for the Dutch participation exemption and therefore were not required to pay tax on the dividends.

 

It will be interesting to see how fast they can deploy all that money (PSA merger special div and PartnerRe money) as otherwise it will just sit there earning negative rates. I appear to be one of the very few who would have preferred if they hadn't sold the insurance company as it causes them a bigger capital allocation issue at a time when assets are expensive (although admittedly getting less so at the moment). That said I should probably trust Mr Elkann to have a few ideas up his sleeve.

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This might be about to change and they will be getting $9Billion from the PartnerRe sale by the end of this year + the FCA special dividend + creditworthiness

 

Things are starting to get pretty interesting, imo. Elkann is a Singleton, not a Buffett

 

Thanks for the write up Sportgamma, just one question, you write:

 

"When Exor receives cash distributions from their investments it creates a taxable event. This tax leakage should be factored into the price as it’s more expensive to hold these assets through Exor as it would be to hold them directly. "

 

Are you sure that this is correct, now they are incorporated in the Netherlands? My understanding was that they were now eligible for the Dutch participation exemption and therefore were not required to pay tax on the dividends.

 

It will be interesting to see how fast they can deploy all that money (PSA merger special div and PartnerRe money) as otherwise it will just sit there earning negative rates. I appear to be one of the very few who would have preferred if they hadn't sold the insurance company as it causes them a bigger capital allocation issue at a time when assets are expensive (although admittedly getting less so at the moment). That said I should probably trust Mr Elkann to have a few ideas up his sleeve.

 

I know it's my own bias - but I'm pretty certain there will be ways for them to put the $9B to work over the next 12-18 months with various economies in, or on the precipice of, recessions.

 

I did think it strange they let go of Partner RE so soon, but I do like that they're  getting a decent price for a business in an industry that has largely lagged that return over the last 4-years.

 

Also, I have to believe that there is FAR less benefit to float with interest rates flat/zero/negative so maybe not a bad time to be selling an industry that just became severely structurally challenged on the investment side.

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This might be about to change and they will be getting $9Billion from the PartnerRe sale by the end of this year + the FCA special dividend + creditworthiness

 

Things are starting to get pretty interesting, imo. Elkann is a Singleton, not a Buffett

"When Exor receives cash distributions from their investments it creates a taxable event. This tax leakage should be factored into the price as it’s more expensive to hold these assets through Exor as it would be to hold them directly. "

 

Are you sure that this is correct, now they are incorporated in the Netherlands? My understanding was that they were now eligible for the Dutch participation exemption and therefore were not required to pay tax on the dividends.

 

No, I think you are absolutely correct.

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Does anyone have an idea of how certain the close is on the PartnerRe sale at $9 billion?  It's a Memo of Understanding with certain conditions (approval of workers councils, etc) that in normal times would seem like formalities, but it is not normal times.  They say they expect sale to close by end of year.

 

The stock is awfully cheap if the sale goes through, but that seems like far from a certain outcome.

 

https://www.exor.com/press-releases/2020-03-03/exor-announces-memorandum-understanding-sale-partnerre-covea-9-billion

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There are always outs in any contract. But I doubt Covea backs out. They are a strategic buyer and surely have a long-term plan for this asset and financing in place. The virus doesn't change things from a long-term perspective.... Of course, anything can happen. If they did back out, Exor can try to sell it to somebody else. If Exor has to hold PRE for awhile, I don't see this as a big negative for Exor... Basically, I wouldn't shy away from Exor because you're worried about the PRE transaction - not at these prices. My two cents anyway...

 

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Sure.  But that’s priced in.

 

Honestly, a company that trades at a massive discount to NAV, with assets that trade at massive discounts to IV, with a long-term track record of excellent capital allocation, is about to have a liquidity event of $9 billion to put to work in this chaos as they see fit.

 

It's hard for me to come up with something that would be a better buy at this time.

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Sure.  But that’s priced in.

 

Honestly, a company that trades at a massive discount to NAV, with assets that trade at massive discounts to IV, with a long-term track record of excellent capital allocation, is about to have a liquidity event of $9 billion to put to work in this chaos as they see fit.

 

It's hard for me to come up with something that would be a better buy at this time.

 

IF they have a liquidity event.

 

Also WHEN.

 

It could be cancelled or delayed, so they don't get 9B to spend "in this chaos".

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