" Mom, the markets are high (from a historical perspective PER between other) and I can not find good opportunities such as "value". What should I do? >>
First, stop crying over your fate. ;-)
In such a market, there is no miracle cure. If you feel that the market is really expensive, the first solution is to be a maximum liquid. The idea behind this solution is to take advantage of future opportunities that will arise if the market is actually the top of the cycle and it turns abruptly. Make her little shop sells when everyone screams and panic, it's true that it is good!
A Value and Profit, we do not favor this solution. Rather, we believe the market is actually quite expensive - yes, it is more expensive than in March 2008 for example ... - But that it may stagnate at these levels for some time. This is only our opinion but if you have the same feeling of a market effete, our second solution may interest you!
There is a type of listed company that is still largely underestimated: the private equity firms that have a significant discount to their Net Asset Value (NAV).
Well, let's start with definitions.
What is private equity? Wikipedia will provide an excellent explanation . To summarize, private equity (PE) is the "unlisted". What is amusing is that there are companies that have a PE activity and are listed!
Net Asset Value or NAV? Definition available on the website of Vernimmen . To summarize, this is a calculation provided by the investment companies in PE that would be the market value of their portfolio. It is an indicator closely watched because investors can be easily reconciled during the action.
The company we are interested in a portfolio of small companies and a discount on its impressive ANR.
These OFI Private Equity Capital (code = OPEC). Last course: € 7.81.
ANR = € 16.43 to 30.09.09 - you can refer to the release of the company
Consider a potential of 110%!
Demonstration graph of the discount below
course, do not take cash for ANR. This calculation is after all a estimate the value of the equity portfolio at time t .
However, several factors are reassuring when the value of investing in OPEC:
1. the majority shareholders of OPEC are mutual insurance which by its nature has a conservative approach Investment: MACIF Mutavie, MAIF Insurance Mutual Officials and Fila Maif
2. Olivier Millet - the CEO - has shares in the company (more than 2%). His interest is shared with the shareholders of OPEC: he eats the same cake!
3. in each firm LBO portfolio, management has a share large shareholder, which means that what is good for him and good for the shareholders of OPEC. Again convergence of interests between managers and small shareholders.
4. OPEC's portfolio is relatively well diversified (10 companies) out of high-tech sectors (less cyclical). You can make your own assessment by taking a look at the presentation in H1 2009.
5. amortization of debt year-end 2009 are not included in the calculation of NAV at the end of September and will have a positive mechanical effect on NAV as at 31.12.09
6. this type of security can benefit from leverage of LBO with the skill and expertise of a management team deeply involved
7. the deep discount to NAV is additional security. Even if there was an increase in capital - it The main risk of this type of society - OPEC would gain credit while still a title with strong potential
Finally, you should probably ask this question:
"What is the relationship between the title and a high market / expensive?"
- the answer will be short and simple. The company sell their stakes in PE at the top of the valuation range of 2 major ways:
1) either by an IPO. Now, we see although operations are slowly returning (CAM Medica and the French market). A market "property" valued is a good source of opportunity for investment securities for the benefit of the seller and the buyer rarely (think rotten to introductions, many during those periods).
2) either by selling its holdings to another actor PE. Right now, money is cheap. It is still not very abundant, but it is possible that the debt go back. Just look at the subscription rate record of the last bond investments: so there is cash on the market.
What do you think?
Can we still speak of value investing by investing in a company that makes the LBO on small caps? Do you consider the risk too great (liquidity, LBO, private equity, ANR blur, portfolio holdings too fragile ...)?
Ticker: OPEC
course the day of publication: € 7.81 (da you closing 02.02.10)
Tip: PURCHASE
Main risk: highly leveraged
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