In the past, when Daejan’s (LSE:DJAN) share price to shareholders’ equity (NAV) ratio fell below 0.6 the subsequent five years gave shareholders a return averaging over 100%. Today Daejan’s shares stand on a ratio of merely £52.90/£120 = 0.44.
The make-up of shareholders’ equity Daejan’s balance sheet is really simple: it holds about £2.6bn of property assets against which it has borrowed £0.5bn. It also has £0.1bn or so in cash and a similar amount in receivables, which is offset by payables. The company accountants acknowledge that the company will eventually have to pay around £0.3bn in taxes for things like unrealised gains when, eventually the assets are liquidated (deferred taxes). Market capitalisation is 16.3m shares x £52.3 = £852m. ... If you want to read more of this article or more articles follow my newsletter here.
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Osias was born in Poland in 1897. In 1939, leaving his wife and children in Poland with the intention of settling them in England once he could obtain visas, he set sail from Danzig for the UK. It turned out that Osias’ ship was the last to leave the port before the Nazi invasion. His wife and three children fled Danzig but were caught and, tragically, perished in the holocaust.
In London’s East End, he was virtually penniless but hard working, and eight years later in 1947 remarried, to Nechama Stempel. Their two sons, Benzion Freshwater and Solomon Freshwater are the two executive directors of the company today. Landmark London properties were acquired by the Freshwater family in the 1950s, and in 1959 their empire was sufficiently established to warrant a stock market listing. They chose the parsimonious method of a reverse takeover. Assets then amounted to £4m and shares traded at 29p. It grew rapidly through the 1960s – in one transaction over 3,000 houses and flats were bought at “what today would seem a paltry consideration” (company website) - becoming London’s “largest private landlord”. They bought and still own many 1920s and 1930s mansion blocks. ... If you want to read more of this article or more articles follow my newsletter here. I’ve bought Daejan (LSE:DJAN) for my modified price earnings ratio portfolio. It has two outstanding virtues. First its shares, at my buying price of £52.90, are merely seven times earnings per share when EPS is averaged over the last decade. Second, its net assets are worth £120 per share, thus it stands on a discount to net assets of 56% (no, it does not have high borrowing). Daejan holds residential blocks and commercial property in London, New York and elsewhere in the UK and USA, and rents them out. Occasionally there are opportunites to develop properties to enhance value, e.g. it holds a block on Oxford Street which it is going to redevelop soon. Mr Market seems convinced that there will be a recession in the UK and USA of such ferocity that rents are going to fall dramatically and property market values halve.
Well, maybe. In the early 1990s recession – which was pretty nasty - Daejan’s portfolio valuation fell by no more than 10% ... If you want to read more of this article or more articles follow my newsletter here. My goal when I started writing a blog on this website was to help people gain investing knowledge, a deeper understanding of the stock market and to discipline my investing analysis.
A year or so later, ADVFN approached me to write my ideas as a newsletter for them. My aim there is to help investors gain a head start in identifying companies selling at good value - you can also check my performance. I write 2 to 3 newsletters per week - investing is about making the right decisions, not many decisions. You can see my newsletter here. |
Glen ArnoldI'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk investing is about making the right decisions, not many decisions.
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