Vanshap Capital's Q1 Letter: Thesis on Autohellas

Evan Vanderveer and David Shapiro's investment firm Vanshap Capital is out with its first quarter letter.  In it, they provide an update on their holdings and introduce their newest investment.

With all the turmoil in Greece, there are bound to be opportunities.  Vanshap has found one via shares of Autohellas SA (GA:OTOEL).  Controlled by one of the wealthiest families in Greece, the company represents Hertz as exclusive franchise partner in various European countries.

Vanshap writes,

"We believe Autohellas is relatively well positioned in the unlikely departure of Greece from the Euro.  The company's debt, provided by a consortium of domestic banks, would likely convert to drachma should such a currency reappear.  On the asset side, we would expect the Hertz business to continue to collect Euros from rental car bookings, while surplus vehicles are likely to be inflation protected and could be liquidated over time.  Lastly, and most importantly over the long-term, we suspect that a giant 'FOR SALE' sign on the Greek islands would significantly boost tourism in the country, benefitting rental car operations.  Nonetheless, risks of a further decline in the leasing business or political calamity disrupting tourism in the short-term linger."

Their full thesis on Autohellas is embedded below:

Vanshap Capital's Q1 Letter
*Update: Removed by request

Evan Vanderveer Long Keck Seng Investments & Fleetwood Corp at Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Evan Vanderveer of Vanshap Capital who pitched a long of Keck Seng Investments and long Fleetwood Corp.


Evan Vanderveer's Sohn Canada Presentation

Co-runs $45m AUM with a focus on global deep value investing.

Pitched LONG Keck Seng Investments, a real estate company, with property holdings around the world. Currently, a HKD $3B market cap and owns assets such as W hotel in San Francisco (15% cap rate purchase), Owns 7 different residential and 3 commercial buildings in Macau and is in the process of buying the Sofitel Hotel in New York (paying 5% cap rate). It is low levered world class real estate property, trades at ~70% of tangible book, ~10% FCF at these levels. About 30% of estimated NAV using market rates. Even if they decrease the value of the assets by 40%, you get a double from the current stock price.

Some potential catalysts include turning the W Hotel into a REIT, continuing to divest Macau real estate, initiating capital returns to shareholders. The company has very large insider ownership, which makes it quite illiquid. The company has doubled FCF per share last 3 years while continuing to make smart acquisitions.


Next, pitched LONG Fleetwood Corporation, an Australian manufactured accommodation company (Makes RV's and such). Brand names are Camec, Coromal/Windsor and it’s currently trading ~70% of tangible book value and 8x 2015 EPS. Believes it has significant underlying earnings power, and half the current is associated with government backed cash flow stream from Osprey (subsidized housing).

EBIT has come way down for a few reasons, causing Net Debt-EBITDA to creep up to 2-3x. Camec has been hurt by foreign price competition, particularly from China and Asia in general. They have also worked to restructure Coromal/Windsor brands. If the company can reap the benefits of a recovery and some cost cutting, can reach 0.45 EPS in 2015, price target at $4.5. (~65% upside from closing prices).

Be sure to check out the rest of the presentations from Capitalize For Kids Sohn Canada here.

Evan Vanderveer & David Shapiro's Pitch on EGI Financial & Eurobank Properties: Value Investing Congress

We're posting up notes from the 2013 Value Investing Congress in New York.  Next up are Evan Vanderveer and David Shapiro of Vanshap Capital.  Their presentation was entitled "Global Below Book Value Investing" and pitched EGI Financial Eurobank Properties.

Evan Vanderveer & David Shapiro's Value Investing Congress Presentation

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Run $37M, have 13% of their fund in two ideas.

EGI Financial 

(8% of their fund)  Based in Ontario, Canada.  Trades on TSX, stock is EFH, $145M market cap.  P&C company.  Lost 50% of income in diversified operations.  Kind of a mess, but they say value investors are working with them.

Eurobank Properties

(5% of their fund). Trades in Europe, symbol EURO. Largest Greek REIC, trading at 63% of book value, 12% implied rental yield.  

Catalyst is company can use excess balance sheet capacity to buy Greek real estate assets at a discount.  Reason for opportunity: Uncertainty surrounding Greek economy.

Mainly office buildings, fairly blue chip tenant base.  Eurobank is 37% of their tenant base, however.  Long leases, average is over 10 years, and linked to CPI.  Greek economy mirrors the US in the Great Depression. Hard on office market; vacancy rates have doubled, rents flat to down.  Good news is no new construction for 5 years.

Based on replacement value, stock could double.  Clean balance sheet, strong management, high quality properties with blue chip tenants, and trades at a discount. 

Be sure to check out the other presentations from the New York VIC here.