Morguard Corp T.MRC

2020 and Q4 results are in

[pierrelebel]

link

Link to short form results

Shareholders equity (book value) per share remains over $300

Trading under $105

Patience folks!

[MTLfinecity]

you know the book value is fake especially "thanks" to their large ownership in Morguard REIT. 

[pierrelebel]

MTLfinecity wrote "you know the book value is fake..." Actually, I do not "know" that! Could you please provide details how you reach that conclusion - specifically. My wife and I are shareholders of MRC and unitholders of both MRT.UN and MRG.UN Disclosure - yes I think Montreal is a fine city as I was born there in 1945.

[MTLfinecity]

of course, I'm more than happy to explain this:  -MRC has large ownership in MRT.UN and owns malls itself. MRT.UN has a large ownership in regional malls as well..Obviously, these assets can only be liquidated for less than book value because of future declining earnings -MRC has a small stake in hotels, these assets deserve to trade at a discount -Needless to say, office properties

[pierrelebel]

Hi MTLfinecity - Thank you for your reply. "this book value overstates the value of MRC's properties by at least 20-30%." Please take a look at the 2020 financial statement.  MRC and the trusts have already taken a huge reduction in value of their reak estate assets to reflect the current situation.  The current shareholders equity (book value) reflects the discounting

[MTLfinecity]

Yup, MRC and MRT.UN only. I play the recovery trade.  If you listended to the MRT.UN conference call, you'll really be disppointed in the outlook.....  Good luck.  These dogs gonna stay in the doghouse for a while 

[Shirtlessnomore]

Agreed, and impossible to say whether or not the value of those properties should even be discounted going forward, for all we know they are more valuable in a year, this might sound far fetched but it is entirely possible. Cheers

[mariorizzi]

You can't just reduce the value of the shares by 25% or 35% in order to come to a book value for the stock. You have to reduce the value of their portfolio, which is considerably larger, and which eats into the equity in the company, and then calculate your share price for there. So far MRC has not considerably reduced the value of their overall holdings to reflect reality. And their cap

[pierrelebel]

mariorizzi - Seriously? Twelve years ago (2009) you posted against Rai Sahi making an offer to buy Tri-White below book value.  Are you still mad at him for that? Please take a few minutes to read MRC 2020 financial statements. In the last twelve months the market has discounted shares of MRC by almost 45% from over $200 to $110 or so. There is no question that some of their "retail

[mariorizzi]

Mall values have plunged 60%. https://www.bloomberg.com/news/articles/2021-03-01/mall-values-plunge-60-after-reappraisals-triggered-by-bad-debt Office has fallen very hard as well. Combined, these make up 50% of Morguard's value. Rising interest rates will eat into profitability. The latest round of debentures issued by the company in November had a significantly higher interest rate

[Malpeque2]

Rai Sahi has plenty of levers to pull and buttons to push here in the Morguard empire to create shareholder value. It looks to me like a total opression of the minority shareholders by this Sahi dude.  He won't lift a "F$(king finger to help.      Plenty of assets performing well to sell and use the proceeds to pay down debt and repurchase shares at historic lows

[mariorizzi]

Most of the malls are half empty. A few in the USA are completely empty and have been closed for years.  Redevelopment is expensive. The North Shore Square mall in Louisiana is completely vacant and has been ready for redevelopment for 5 years already. It will cost over $50 million. A mall like that is worth less than the land value at this point. It's located in Slidell... which is in

[pierrelebel]

mariorizzi wrote: "Mall values have plunged 60%."..... With all due respect, the US mall problems outlined in the Bloomberg article have little to do with the current operations and assets of Morguard. Once again, if you are really interested in MRC, take the time to read and understand the 2020 annual financials.

[mariorizzi]

I have read every Morguard report since 2007. I have seen the company rise and now fall. If you think malls in Canada are going to make a comeback, I have a bridge to sell you.  After the rental help from the government expires, you will truly start to see the destruction of values in the mall sector. Offices are only just now starting to not renew their leases or to cut back on space

[MTLfinecity]

Very through analysis. So if i follow your logic, any good news about rent or occupancy increase  will trigger a rapid upward revision of asset value. Therefore, equity will go up even faster because of the leverage? Hey, thanks for the encouraging analysis, very insightful!