Richard Simmons presented his in-depth investment thesis on Daejan Holdings (UK: DJAN) at European Investing Summit 2017.
Daejan is a property-owning company (75% UK, 25% US; 54% residential, 46% commercial). Property is primary or secondary, often in central locations and almost all freehold or long leasehold. Daejan is a gradual grower, relying on rent increases, upgrades in the existing estate, small acquisitions, and limited development. Over a full cycle it returns 10-12% in NAV growth, dividends included. The balance sheet is extremely conservative. Daejan is priced at 58% of NAV, a discount of 42% to its fully realizable immediate value. Daejan has an inside value because one might sell it if it traded up to NAV, leaving only the ongoing 10-12% return on NAV.
Note: Richard Simmons discussed Daejan Holdings in a session that also included a discussion of used car finance company S & U (UK: SUS).
About the instructor:
Richard Simmons joined Credo as an Investment Manager in 2001. He discretionarily invests managed accounts and is the Investment Adviser of a Cayman fund, Derby Street Investments. Before becoming an investment manager he was a banker for eleven years. He was educated at Oxford and Cass Business School and is the author of “Buffett Step by Step”.
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