Pargesa Holding: Swiss-Listed Holding Company with Significant Investments in Public and Private Companies

Paul Lountzis presented his in-depth investment thesis on Pargesa Holding (Zurich: PARG) at Wide-Moat Investing Summit 2013.

The Bottom Line: Swiss-listed holding company with significant investments in public and private companies, including Total (28% of Pargesa flow-through adjusted net asset value as of May 31, 2013, after the acquisition of SGS), Lafarge (25%), Imerys (16%), SGS (15%), Pernod Ricard (14%), GDF Suez (6%), Suez Environnement (3%), other holdings (4%), and net debt and other (-11%). The sum-of-the-parts valuation yields CHF96.5 per Pargesa share, based on market prices of the publicly-listed investments. Based on the recent share price of Pargesa, this implies a discount to NAV of ~30%. Outstanding track record of the management team led by Frere and Desmarais. Where is the moat? Both at holding company level (structure, management longevity, capital allocation) and select investee companies (especially SGS, Pernod Ricard).

About the instructor:

Paul Lountzis founded Lountzis Asset Management, LLC in October 2000. He has more than 25 years experience in the investment industry, beginning his career with Royce & Associates, a New York City-based investment advisory firm managing the Royce Mutual Funds. Paul spent nine years, with the last five as a partner at Ruane, Cunniff & Goldfarb, Inc. an investment advisory firm managing more than $9 billion including the Sequoia Mutual Fund. While at Ruane, Cunniff & Goldfarb, Inc., Paul also evaluated several companies for Warren E. Buffett, CEO of Berkshire Hathaway.

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