Though regulators require very little financial reporting from hedge funds–private investments that generally take the form of limited partnerships in the U.S. and limited liability companies overseas Plus Funds will require candor from its managers in order to calculate daily and in most cases real-time net asset valuations.
Because Europe is only now pulling out of its economic doldrums, its REITs are the cheapest, selling at a discount to their underlying property valuations, called net asset value (see table, below).
We see the sector valuation, at 1 times net asset value, as attractive.
Afren is our preferred name for net asset value growth potential at a reasonable valuation.
We believe that Citizens might eventually achieve an exit valuation of 1-1.3 times net asset value based on comparison with its peer group.
Three balance sheet factors are highlighted in today's release: 1) group is now net cash (¥52m); 2) the latest external hotel valuation supports an adjusted net asset value of 824p per share and 3) the chairman states no intention to dispose of gateway assets [Singapore, London and New York] but this leaves the door open for regional UK/US disposals, in our view.
That valuation determines the price, or net asset value, of all the fund shares bought or sold that day.
A starting point for the valuation of the company will be its net asset value, which is 33p, including 53p of non-current assets.
Though there is, we estimate, another 35p of net asset value to come from on-site developments, the share valuation is demanding at this level and we retain our hold recommendation, with our target price raised to 935p [from 885p].
Analysts at Espirito Santo, who have a neutral rating on the company, said: In our view, today's capital raising is opportunistic given that St Modwen's valuation has recently improved to a small net asset value premium and the first capital call at New Covent Garden Market is unlikely until early 2015.
Sector valuations appear stretched on both a discount to net asset value and ultimate earnings recovery basis.
