Real Estate
Mike Churchill tops up his holding in his Classical Insights portfolio - this homebuilder / real estate developer is too cheap trading on a P/B of 0.5x with solid financials and a growing top line. Part of the issue could be that the stock only listed two years ago and the firm is based in Recife (Northeast Brazil) so foreign investors may not be familiar with the story (foreign ownership is very low). Net cash position should grow despite ploughing money back into launches. Gross margin rose to 36.4% in 2021, which is a fantastic figure for this industry in Brazil (the Sao Paulo builders have been struggling to get over 30% in recent years). TP 13.81 BRL (100%+ upside).
Edition: 143
- 02 September, 2022