If you are looking for a hidden gem in the Canadian market, you might want to take a closer look at Senvest Capital (TSX:SEC), a diversified holding company that invests in public and private equities, real estate, and other assets.
Senvest Capital has a track record of generating impressive returns for its shareholders, with an annualized return of 17% since inception and a cumulative return of over 2,000%. The company has a value-oriented investment approach that seeks to identify undervalued and overlooked opportunities across various sectors and geographies.
One of the main drivers of Senvest Capital's performance is its stake in two funds, Senvest Master Fund and Senvest Technology Partners, which are consolidated into its accounts. These funds invest primarily in small and mid-cap companies with high growth potential, often taking concentrated positions in their high conviction ideas. Some of their largest holdings as of December 31, 2022 were Paramount Resources, Capri Holdings, Marriot Vacations, Tower Semiconductors, QuidelOrtho, Ebay and SolarEdge Technologies.
Some of Senvest Capital's previous investments have also paid off handsomely, such as its stake in GameStop, the video game retailer that became the target of a massive short squeeze orchestrated by retail investors on Reddit's WallStreetBets forum. Senvest Capital reportedly made a $650 million profit from its GameStop investment, which it exited in January 2021. Another successful exit was Spotify, the music streaming giant that went public in April 2018. Senvest Capital was one of the early investors in Spotify and participated in its Series G round in 2015.
Senvest Capital also has a portfolio of real estate investments, including self-storage units in Madrid, Spain, as well as investments in private real estate companies, trusts and partnerships. These investments are measured at fair value based on external valuations from third party appraisers.
As of December 31, 2022, Senvest Capital had total consolidated assets of $5.7 billion and total equity of $1.6 billion. The company had a net loss attributable to common shareholders of $326 million or $131 per share for the year ended December 31, 2022, compared to a net income of $733 million or $289 per share for the previous year. The net loss was mainly due to the negative change in fair value of equity investments and other holdings, which totaled $810 million in 2022 versus $2.4 billion in 2021. This reflects the volatility and choppiness of the financial markets amid the ongoing pandemic and geopolitical uncertainties.
However, I believe that Senvest Capital's long-term prospects remain attractive, as the company has a solid capital structure, a diversified portfolio of high-quality assets, and a proven ability to identify and capitalize on emerging trends and opportunities. The company also has a shareholder-friendly policy of repurchasing its own shares through normal course issuer bids when they trade below their intrinsic value.
As of April 6, 2023, Senvest Capital's stock price was $327 per share, giving it a market capitalization of $810 million. This implies a price-to-book ratio of only 0.51, which is significantly below its historical average and its peers. I believe that this represents an attractive entry point for investors who are looking for exposure to a well-managed and diversified holding company with a strong value proposition.
Disclosure: I own 2% of Senvest Capital's shares in my personal portfolio and I intend to hold them for the foreseeable future. This is for informational purposes only and does not constitute investment advice. Please do your own research and consult a professional before making any investment decisions.
No comments:
Post a Comment