Wilhelmsen
Wilhemsen (OSL:WWI, Financial) ~4% of the International Portfolio Another example of a company clearly undervalued by the market and of which we have spoken little is Wilhel-msen, a Norwegian industrial conglomerate, controlled by the Wilhelmsen family (5th generation) with businesses with leading positions in their segments. With a capitali-sation of 700mn euros and net cash, the company has bought back its own shares.
Its main assets are 38% of Wallenius (WWL), a shipping company, which transports cars and capital goods and has logistic distribution centres in the world's most important ports. Given the economic uncertainty and COVID-19, transporting cars and capital goods is at the bottom of the cycle, yet in this complicated year they have generated positive cash flow. At depressed market prices, this share is worth 360mn euros today (to put it in context at the beginning of last year before COVID-19 it was worth 25% more, during 2017-2018, a more normalised period, it was worth 65% more on average).
WWI also has several unlisted subsidiaries, which are ignored by the market. The most significant is Wilhel-msen Maritime Service (WMS) that it fully owns, WMS is the marine products and services subsidiary (including crew management services, chemicals, consumables, logistics and safety) and generates a standardised cash flow of ~41mn euros.
In addition, WWI has 9% of Hyundai Glovis, the logistics and distribution arm of the Hyundai group. The company should benefit from the cycle's recovery (higher volumes) but is also beginning to benefit from the expected reorga-nisation of the Chung Family's structure and corporate governance. At market prices, this shareholding is worth 475mn euros today.
In short, a family-owned company, a world leader in its businesses, well managed and trading at a discount to the value of its assets.
From Francisco Garcia Parames (Trades, Portfolio)' Cobas Asset Management fourth-quarter 2020 letter.
