Maybe we can see a break in the cup and handle pattern soon on the Unibail Rodamco Westfield stock. I personally believe URW will break the pattern upwards, because of the high dividends and the price drop harsher than I think is needed. The Net Asset Value is almost 4 times the current stock price and the dividend would be 18,6%. They decided not to turn out dividends, which may be a positive decision to overcome liquidity problems in the future.
I am relatively new to making these kinds of analysis but would like to hear your opinion on this analysis.
1) NAVs are most of the time lagging reality, be ready to accept downward revisions; 2) after the halting of div payments this year do not expect div's to go up to previous levels in the coming years; 3) European retail, a decent chunk of URW's exposure, has not been particularly strong the last couple of years. Many marginal players are expected to topple over this year because of corona lock down and general economic ramifications going forward. Moreover, online shopping will further increases to the detriment of 'bricks and mortar' because of increased 'virus anxiety. 4) it would be prudent to include in your analysis some % probability of a massive capital call/share issue resulting in massive dilution for current shareholders. And some % probability for a worst case scenario which could mean bankruptcy protection followed by a restructuring with a complete write off for current shareholders. Taking it all in, if you believe in the future of URW you are currently better of owning senior debt compared to equity. The company will continue I am not sure about the current shareholder base.
diederikvanz2000
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@michielsteenman I agree with you on point 2 and 3. The big thing with URW is that there were so many investors just in it for the dividend who stepped out after the corona crisis made the dividend not payable. This is combination with the good solvability and a NAV of €213 make that I believe the stock is oversold.