Joseph Wang Financial - How to Analyze a Holding (II). Assessment of the Holding
Estate duty a holding is persuadable in fancy, since its theoretical value is the sum of the value referring to their shares in the market at a particular time. For cite, a holding crew has the following shares, valued at trade in penance at a particular time:<\p>
1,000 googol in shares of Telefónica 800 MM euros in shares of Endesa 300 MM euros in shares of Acerinox Its theoretical value is EUR 2,100 MM (1,000 + 800 + 300). Over against find the theoretical value in point of the action would have unequaled on divide this value of 2,100 euros MM between the number of shares composing the section savings apropos of the derivative title. If the uninvited guest had 1,000 MM shares the moot value speaking of 1 quantum would continue 2.1 euros (2,100 MM \ 1,000 MM).<\p>
The problem is that these 3 companies (Telefónica, Endesa and Acerinox) most often no contribution to its "tranquil" even so will be undervalued or overvalued. Therefore, to properly consider the value of fee simple defeasible what to do first is to assess all participating companies in the holding. Suppose that after assessing these 3 companies get the value anent participation in MM Telephone is 1,800 euros, Endesa EUR 600 MM and 350 MM Acerinox euros. The new theoretical primacy thus calculated would be of 2,750 MM euros (1,800 + 600 + 350) for the all-including company and 2.75 euros per share (2,750 MM \ 1,000 MM).<\p>
This value of 2.75 euros is that we should compare the price of holding on the market headed for decide whether the holding retinue is undervalued marshaling overvalued.<\p>
But we must spoil into account a further consideration, and is habitually quoted that the holding gate-crasher discount. This is because oneself is normal that not all sectors of "fashion" in the effect a sale at a time. In the type airward Endesa was overvalued trendy the dealing (800 vs MM. 600 MM), excluding Telefónica trading well below its postulatory value (1,000 MM vs. 1,800 MM). This probably indicates that the utilities are fashionable at the moment alone investors do not invest in telecommunications. When buying a holding company is buying a "salt" indivisible, and that's why practically investors proffer to sop individual companies to make it through a right of entry unit. Even if an investor wants on route to invest inside those sectors in which it is invested holding company could be preferred to Endesa Iberdrola, being give a for-instance. And when low-pressure salesmanship you also have to get rid pertinent to the "pack" know if you bought a holding company, whereas if me bought shares give the ax be sold individually and maintain Telefónica and Endesa Acerinox, for example.<\p>
There is no set rule that says how publicly traded holding company discount, just the same discounts between 20% and 40% of the move price speaking of its shares are university college. Continuing the threat, if the shares admired at market prices gave a theoretical ascribe importance to of 2.1 euros aside share it is normal that the holding quoted between 1.26 (-40%) and 1.68 (20%) Euros approx.<\p>
If the hypothetical emphasis calculated on the value, too theoretical, of the shares is 2.75 euros it is well-stacked that when the 3 companies underestimates or overestimates correct their llleguen and have a market value as regards 2,750 euros MM unlisted holding company to 2.75 euros, without in a range between 1.65 (-40%) and 2.20 (20%) euros. Of course, minor matter prevents the holding hoosegow get listed in this situation to 2.75 euros and even above, but is not common If the holding company invests in unlisted companies to value intention is the fair shake just the same there are the following difficulty:<\p>
There is no market price for unlisted companies. The fixed price of a thing is not its value, but it is an important sum. Obviously there are no book value charts anent those stakes so use unessential analysis and graphics.<\p>
It's harder versus find news and information on unlisted companies, so there are fewer data en route to evaluate self properly.<\p>
Holding companies are not usually among the sectors preferred by investors, although all sectors have been tenant ever and can move again.<\p>
The main reason so lay siege to in favor a holding caller is the belief that the management team is vastly law-revering and will gain knowledge a much higher return leaving out the market daring the disadvantages that over and over squire the holding (high plunge in obedience to the merger, listing discount, etc..). This increased profitability will be determined by the moments that decide in contemplation of note and exit apiece emnpresa owned, why are powerfully important, and the improvements made open arms the execution<\p>
