{"id":449,"date":"2023-04-20T01:01:00","date_gmt":"2023-04-20T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=449"},"modified":"2023-04-19T09:48:04","modified_gmt":"2023-04-19T09:48:04","slug":"astoria-investments-initiation-of-coverage-unique-growing-businesses-discounted","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=449","title":{"rendered":"Astoria Investments \u2013 Initiation of Coverage \u2013 Unique &amp; Growing Businesses, Discounted"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: ARA \u2013 Market Cap: R492m \u2013 Discount to NAV: 36%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-4efbabe8-b67a-4ea5-a319-03b819428c65\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/Astoria-Investments_Initiation-of-Coverage.pdf\"><strong>Astoria Investments &#8211; Initiation of Coverage &#8211; Full Report<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/Astoria-Investments_Initiation-of-Coverage.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-4efbabe8-b67a-4ea5-a319-03b819428c65\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Astoria: Structure, Aim &amp; Portfolio<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A tax-advantaged, Mauritian \u201cHoldCo\u201d that is listed on both the JSE and the SEM, Astoria Investments\u2019 aim is to grow its hard currency (i.e. USD) NAV per share at a high real rate over time.<\/li>\n\n\n\n<li>Having permanent capital &amp; an aligned investment manager (see below), Astoria has invested in a range of unique, unlisted, growing businesses with strong, aligned management teams.<\/li>\n\n\n\n<li>The largest of these is Outdoor Investment Holdings (a well-run retailer, wholesaler &amp; manufacturer focussing on the outdoor, hunting and safari markets) with other notable investments in diamond mining (land &amp; marine), tertiary educational (health &amp; skincare), vehicle finance &amp; IP-led protective biking equipment.<\/li>\n\n\n\n<li>The Group does invest in the listed space when value is present, for example, their investment into RAC Preference shares as a discounted entry-point into Goldrush (amongst the largest domestic alternative gaming business in South Africa).<\/li>\n\n\n\n<li>These investments are relatively conservatively valued in NAV (see our analysis and arguments for this in <a rel=\"noreferrer noopener\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/Astoria-Investments_Initiation-of-Coverage.pdf\" data-type=\"attachment\" data-id=\"450\" target=\"_blank\">our full report<\/a>).<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/2023-April-19-ARA-Portfolio-1.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/2023-April-19-ARA-Portfolio-1.png\" alt=\"\" class=\"wp-image-452\" width=\"480\" height=\"388\" srcset=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/2023-April-19-ARA-Portfolio-1.png 582w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/2023-April-19-ARA-Portfolio-1-300x243.png 300w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Investment Manager &amp; Alignment: RECM Global<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>RECM Global, offers an efficient investment manager that aligns interest with other shareholders through its association with key directors that <em>also<\/em> personally hold c.22% of Astoria\u2019s ordinary shares.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: Discounted &amp; Growing<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Updating Astoria\u2019s NAV to current prices, the share price is trading at a relatively large c.36% discount to it.<\/li>\n\n\n\n<li>If we take out our calculated \u201cHoldCo discount\u201d of c.14.6% from this NAV, we arrive at a fair value for Astoria\u2019s shares of c.1170cps or c.25% higher than the current share price.<\/li>\n\n\n\n<li>Rolling this fair value forward at our Cost of Equity (18.1%), we arrive at a 12m TP of c.1381cps that implies a significant potential return of c.57% from the current share price.<\/li>\n\n\n\n<li>Astoria is invested in unique &amp; growing businesses that it values conservatively, which implies a material component driving future returns is likely to be the collective earnings growth of these businesses combined with their high discount rates unwinding.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-4efbabe8-b67a-4ea5-a319-03b819428c65\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/Astoria-Investments_Initiation-of-Coverage.pdf\"><strong>Astoria Investments &#8211; Initiation of Coverage &#8211; Full Report<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/04\/Astoria-Investments_Initiation-of-Coverage.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-4efbabe8-b67a-4ea5-a319-03b819428c65\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: ARA \u2013 Market Cap: R492m \u2013 Discount to NAV: 36% Astoria: Structure, Aim &amp; Portfolio Investment Manager &amp; Alignment: RECM Global Valuation, 12m TP &amp; Implied Return: Discounted &amp; Growing<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[144],"tags":[],"class_list":["post-449","post","type-post","status-publish","format-standard","hentry","category-astoria_investments"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/449","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=449"}],"version-history":[{"count":2,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/449\/revisions"}],"predecessor-version":[{"id":454,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/449\/revisions\/454"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=449"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=449"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=449"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}