Alejandro Estebaranz presented his in-depth investment theses on Publity (Germany: PBY) and Protector Forsikring (Oslo: PROTCT) at European Investing Summit 2017.
Protector Forsikring, with a market value of ~€600 million, is a low-cost insurance company growing ~20%, focused in the Nordics, with expansion potential in Europe (opened offices in Finland and the UK in 2017, with plans for expansion into Belgium, Holland, and Germany). Commercial and public insurance account for 61% and 24% of the business, respectively. The company has only 3% market share in the Nordics, providing ample runway for continued share gains. Protector has ~60% lower costs than rivals in the Nordics and ~80% lower costs than “old” European companies such as Zurich, Axa, and Allianz. The company has a strong culture, and its investment approach is similar to that of other great insurance companies, such as Markel, Leucadia, Berkshire, or Fairfax. Recent statistics include a combined ratio of 92%, ROE of 20+%, and a solvency ratio of 185%. The shares recently traded at estimated P/E ratio of 13x for 2017 and 11x for 2018. Alejandro estimates intrinsic value at NOK 120 per share today, with potential for value to grow to NOK 280-320 over the next five years (compared to recent market quotation of NOK 80 per share).
Publity is a German real estate asset management company with three lines of business: retail, mid-size, and institutional. The company generates a blended management fee of around 1.3% (retail is higher, institutional is lower). They seek to invest like value investors, buying undervalued assets and waiting three years, on average, to sell them at a premium. In the meantime, they collect rent. Publity focuses on the German commercial real estate market, mainly offices. Founder Thomas Olek owns 49% of the shares. He is an experienced investor and cares about shareholders. Olek has good relationships with the German regional banks, the Landesbanken, and the company gets attractive bulk prices. Alejandro estimates fair value at €85 per share, or a P/E ratio of 12x at the end of 2018, plus €4 in dividends.
About the instructor:
Alejandro Estebaranz is the co-Investment advisor of True Value fund since its inception. True Value is a long only equity fund founded in January 2014, and focused in small and mid caps. Prior to True Value, Alejandro worked as an analyst for private investment partnerships. He holds a degree in mechanical engineering and a degree in industrial engineering.
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