Well, Buffett's mentor Benjamin Graham was into unloved businesses, they offer good value.
This company looks like a good way to get residential property exposure at a half price discount to NAV (35c as per annual report vs the 18c share price).
This was one of those financial engineering schemes and probably overstated their property values in the boom years.
But at these lower prices, and with the significant write-downs during the GFC, the property values on the books should be fair value already and those further sales announced today "in line with book value" seem to vindicate this.
While there seems trouble brewing with commercial property, residential seems to be doing very well - quite a few of my colleagues at work seem to have bought houses recently too.
Expect the NAV gap to close as their portfolio is unwound and they return to their core business of developing.
N.b. Long time lurker but think this is my first post on HC.
GPM Price at posting:
90.0¢ Sentiment: LT Buy Disclosure: Held
