This month the model initiated a position in Hong Kong company Cheung Kong Holdings (CHEUY). The company trades at a moderate discount to book value and at a reasonable ratio to expected earnings.
More interestingly their recent decision to spin off hotel unit Horizon Hospitality in a similar structure to a listed business trust should realize full value for the properties and benefit existing shareholders.
Whilst macro concerns would appear to be currently dictating the share price of Hong Kong developers, Cheung Kong looks conservatively run with a strong balance sheet in our opinion and is a long time holding of the Third Avenue Funds.
We are happy to be in such company, particularly when events at the corporate level have the capacity to create value.
The model’s other holdings remain unchanged and the we continue to seek attractive opportunities to deploy its remaining capital.
The investments discussed are held in client accounts as of November 14. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
