Marcus & Millichap: A Wide Moat Business Priced At A Substantial Discount To A Growing Intrinsic Value

Chris Karlin presented his in-depth investment thesis on Marcus & Millichap (NYSE: MMI) at Wide-Moat Investing Summit 2016.

Marcus & Millichap is a national commercial real estate brokerage firm focused on properties in the $1-10 million price range. In addition to brokerage services, MMI also provides financing and research services. MMI has a leading market share in a highly fragmented market and benefits from its national footprint and longstanding customer relationships developed over its 45-year history. The equity has sold off significantly since late 2015 on macro concerns regarding rising interest rates and the real estate cycle. An unlevered company sitting on a pile of currently low-yielding cash that has proven its ability to remain profitable at cycle bottoms and has a 45-year history of navigating through a cyclical industry doesn’t seem as scary as the consensus opinion would indicate. Chris believes there is upside in his base case of 28-57% to the recent quote and limited risk of permanent capital impairment, providing investors with a highly asymmetric reward-to- risk opportunity in a high moat business.

About the instructor:

Chris Karlin has been in the investment business since 1991. Prior to founding Aquitania Capital Management in 2012, Christopher held positions as a Research Analyst and Portfolio Manager at First Pacific Advisors, Kestrel Investment Management and Fairview Capital Investment Management. Christopher interned with Farallon Capital Management while pursuing his MBA. He began his career with Wells Fargo Nikko Investment Advisors which later became a part of Blackrock. Christopher received his BBA from the University of Wisconsin in 1990 his MBA from Yale University in 1998 and has held the CFA designation since 1994.

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