|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Third Avenue Management Comments on Newhall Holding Company LLC
Posted by: Holly LaFon (IP Logged)
Date: July 5, 2013 11:58AM
Newhall Holding Company LLC [size=13px; line-height: 1.22][/size] [size=13px; line-height: 1.22]([/size] [size=13px; line-height: 1.22]NWDHU) [/size] [size=13px; line-height: 1.22]Update: As we noted in our October 31, 2012 report to Fund shareholders, based on the limited trading of Newhall Common, the implied equity market capitalization of Newhall Holding Company LLC was approximately $412 million. We highlighted a "back of the envelope" calculation indicating that the net asset value based on current market conditions should easily be in excess of $1 billion. We also illustrated how house price inflation can translate into much more dramatic lot price appreciation. In our report, we illustrated how a 20% increase in house prices could result in more than a 100% increase in lot prices. According to Case Shiller, Los Angeles has seen the largest drop in for-sale home inventory and has the most positive home price outlook (14%in 2013) of major U.S. cities.The prospects for a continued U.S. housing recovery have resulted in high demand from home builders for buildable lots in major markets and corresponding demand from investors in public and private companies that control land for residential development. Despite its quasi-private status, investor demand for Newhall Common has recently surged, trading has been more active and recent trading prices now reflect an equity market capitalization of over $800 million—nearly double the price six months earlier. The Fund sold 1 million units of Newhall Common during the quarter(approximately 3% of its position) after it received an unsolicited bid from a buyer actively seeking to establish a position.At quarter-end, Newhall Common was the Fund's third largest holding (4.1% of net assets) andwe have no intention of further reducing the position at current prices. While the company still has some land entitlement issues to resolve, we are very confident that Newhall Ranch will be one of the few major providers of residential lots in Los Angeles for the next 15 to 20 years.
From Third Avenue Management's semi-annual 2013 letter.[/size]
Guru Discussed: Third Avenue Management: Current Portfolio, Stock Picks
Stocks Discussed: NWDHU,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.