RE:RE:RE:AGMI am enjoying the discussion today.
Using a dividend discount valuation model results in a share price that approximates the current share price. The only way to disrupt this is to increase the dividend (given an SIB is not possible) and address the Capital Allocation framework and return profile by division.
My hope is that we see some liquidation of these assets and a Special Dividend to shareholders. I believe there is quite easily $100 million to $150 million in assets that could be sold which would put a Special Dividend (say $3 to $5 per share).
While a Special Dividend would be good, the fundamental item that must be addressed is that the market does not see Management as good stewards of the capital from a return perspective as they have historically "re-invested" the return into assets that have generated a diminishing marginal rate of return.
I am not sure what the compensation programs for the Divisional Managers work; however, if I were in Naomi's shoes, I would imagine that these Divisional Managers should have a capital charge hurdle rate charged against their divisional performance that impact their bonus. Perhaps this would need to be structured on a 3-year rolling average basis; however, the fact remains, when capital is "free" Manager will "hoard".
Take my comments for what they are as I am not a real estate expert and it is always easier to be the arm chair expert!
LR