Mathias Wagner of LIS Capital presented his in-depth investment thesis on Grupo Jereissati (Brazil: JPSA3) at Best Ideas 2020.

Thesis summary:

Grupo Jereissati is a holding company that trades at an excessive discount to its subsidiary, Iguatemi (IGTA3), even after taking into account holding costs, lower liquidity, and governance and asset allocation risks. This persistent but diminishing discount is due mainly to past governance issues that have been resolved.

Iguatemi is a leader in the shopping mall industry in Brazil, owning and operating several high-quality malls in prime consumer markets, with stable, highly profitable results. Mathias sees upside potential in Iguatemi, as improved economic conditions in Brazil trigger a recovery in credit and consumption, while a historically drastic interest rate cut has not yet been fully priced into the value of the company’s real estate assets, creating short-term opportunity and an additional margin of safety for the investment.

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About the instructor:

Mathias Wagner worked at Orbe Investimentos for 11 years, becoming a partner. Mathias graduated in Economics at Insper, and has an MBA in Finance from HULT International Business School.

He is also a partner at LIS Capital.