Luis García Alvarez of MAPFRE AM presented his in-depth investment thesis on Merlin Properties (Spain: MRL) at Best Ideas 2018.
Merlin Properties is the largest Spanish SOCIMI, the equivalent of an American REIT, with gross asset value of EUR 10.5 billion. The company has a solid and stable cash flow generation profile, due in part to its size and business line diversification. Stable cash flow should be augmented by operating improvements resulting from “offensive capex”, which should help increase occupancy levels of various assets. The company also benefits from improved management of a portfolio acquired a year ago from Metrovacesa. Luis views the valuation as attractive, offering a significant margin of safety from the recent market price, especially considering the nature of the real estate business and the conservative assumptions embedded in Luis’s numbers.
About the instructor:
Luis García joined MAPFRE AM as an Equity Portfolio Manager in 2015. He had previously worked at Banco Santander as a Market Risk Analyst from 2009 to 2013 and also at BBVA as an Equity Research Analyst from 2013 to 2015. He holds a Bachelor’s degree in Economics from the Francisco de Vitoria University (2002-2007), a Master’s degree in Economics and Finance from CEMFI (2007-2009) and the Value Investing Diploma awarded by the Ben Graham Chair at Richard Ivey School of Business (2016). In 2013, he received the CFA Charterholder designation. Luis is an Associate Professor for the MBA program at Ostelea Business School. Also on the academic side, he has co-authored several papers on the field of finance which he has presented at workshops held at the University of Warsaw, University of Munich, Humboldt University of Berlin, the European Central Bank and the Spanish Finance Association (AEFIN).
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