The first trend is the increased
presence of activist investors in the REIT space.
Our investment thesis highlighted: 1) a negative divergence between GAAP and economic profits; 2) slowing organic growth; 3) high profit growth expectations embedded in the stock price; and 4) the unlikely sale of the company despite
the presence of an activist investor.
I was attracted because of the nearness of the impending spinoff, where the shares were priced at the beginning of May vs. their trading range over the past 12 months,
the presence of an activist investor and the potential for CVEO to become a REIT.
Ideally, I'm also relying on a catalyst, or two — for example,
the presence of an activist investor — which makes it that much easier to anticipate certain scenarios & events.
Not exact matches
Although Wong et al hold only 0.5 %
of FACT's outstanding stock, we think the
presence of Bob Chapman and other noted
activist and deep value
investors on the register (Baupost Group holds ~ 18 %) indicates a good chance
of success for the dissidents.
At this point, however, I do have to conclude that my original thesis was far too optimistic and depended too much on the
presence of activists and «super»
investors.
Its current property valuation & yield, occupancy rate, colossal 66 % discount to NAV, plus the
presence of multiple
activist investors on its board / register, all offer significant operational & share price upside potential.