Unravelling value's decade-long underperformance (and imminent resurgence)

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#11
(18-11-2020, 08:59 AM)¯|_(ツ)_/¯ Wrote: ..
The real concern is the owner will make a mandatory offer and delist the company when it's share price at it's lowest point.

That's really sad.

And, hence the questions on how to avoid these valuetrap.
Luck, again?

..

I always try to buy mid-caps ($2-10 bil) and above companies, where management/CEO/founder/largest shareholder owns a big (>10%) stake. These are harder to be delisted at a bargain to intrinsic value.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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#11
(18-11-2020, 08:59 AM)¯|_(ツ)_/¯ Wrote: ..
The real concern is the owner will make a mandatory offer and delist the company when it's share price at it's lowest point.

That's really sad.

And, hence the questions on how to avoid these valuetrap.
Luck, again?

..

I always try to buy mid-caps ($2-10 bil) and above companies, where management/CEO/founder/largest shareholder owns a big (>10%) stake. These are harder to be delisted at a bargain to intrinsic value.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
Reply
#12
(19-11-2020, 10:04 AM)Wildreamz Wrote:
(18-11-2020, 08:59 AM)¯|_(ツ)_/¯ Wrote: ..
The real concern is the owner will make a mandatory offer and delist the company when it's share price at it's lowest point.

That's really sad.

And, hence the questions on how to avoid these valuetrap.
Luck, again?

..

I always try to buy mid-caps ($2-10 bil) and above companies, where management/CEO/founder/largest shareholder owns a big (>10%) stake. These are harder to be delisted at a bargain to intrinsic value.
Agree with cap size. Some of the small caps don't have good corporate governance. Good, functional independent directors don't come cheap. 

I also looked at "stewardship" - unfortunately this can't be easily quantify; hence have to go vague. 

Suffice to say that to some owners (controlling stake) equity is just an avenue to raise capital. They have no interest to hurt or take advantage of opmi but are not keen to take care of opmi. To them, a general offer 15% above average or highest trading price in last few months is generous enough albeit currently trading at 20% of IPO price. Angel Angel  

The reputation of owner-management , or corporate governance is priced-in.
Reply
#12
(19-11-2020, 10:04 AM)Wildreamz Wrote:
(18-11-2020, 08:59 AM)¯|_(ツ)_/¯ Wrote: ..
The real concern is the owner will make a mandatory offer and delist the company when it's share price at it's lowest point.

That's really sad.

And, hence the questions on how to avoid these valuetrap.
Luck, again?

..

I always try to buy mid-caps ($2-10 bil) and above companies, where management/CEO/founder/largest shareholder owns a big (>10%) stake. These are harder to be delisted at a bargain to intrinsic value.
Agree with cap size. Some of the small caps don't have good corporate governance. Good, functional independent directors don't come cheap. 

I also looked at "stewardship" - unfortunately this can't be easily quantify; hence have to go vague. 

Suffice to say that to some owners (controlling stake) equity is just an avenue to raise capital. They have no interest to hurt or take advantage of opmi but are not keen to take care of opmi. To them, a general offer 15% above average or highest trading price in last few months is generous enough albeit currently trading at 20% of IPO price. Angel Angel  

The reputation of owner-management , or corporate governance is priced-in.
Reply


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