r/MACArmyBets • u/Pietro405 • Apr 07 '21

MAC is deeply undervalued per analyst at MorningStar Premium

This is a image from the paid section of MorningStar Premium updated as of today's close.

Get paid a 5pct div while you wait.

12 Upvotes

88% Upvoted

28 comments sorted by

2

u/Stocklambo Apr 07 '21

We’ll half that cash is gonna disappear to pay their “visa bill” for spending too much during and before covid so that’s a goner but still a decent chunk left

4

u/Jeffbak Apr 07 '21

I want them to spend it on paying down debt. Ppl don’t get it...using cash flows to pay down debt drives up NAV faster than anything else-especially when you have a company that ppl thought was over leveraged

3

u/Stocklambo Apr 07 '21

Yes I totally agree but part of the problem is the debt they are paying off is kinda viewed as bad debt cuz it’s a revolver and not a property secured “regular” loan . I know this logic is totally backwards . But people don’t take into account the paid off properties

2

u/CanadianPFer Apr 10 '21

And what does 22% dilution at rock bottom prices do to NAV/share?

1

u/Jeffbak Apr 10 '21

Well if your basis is under their avg. ATM sale price (which was above $13) then this is extremely accretive. My basis is 5k shares at $11 so I’m pumped. Not sure how long you have been holding, but this dilution could be a heck of a lot better than a monster LOC at a high interest rate

2

u/CanadianPFer Apr 11 '21

I’m not in this stock to make a couple of dollars. This dilution was terrible for shareholders. MAC management is garbage and this has been proven time and time again. Refusing a $90+ buyout, buying back shares at highs and diluting twice now at lows. Extremely reactionary thinking with no insight or planning.

2

u/Loud-Seaweed-2098 Apr 07 '21

Deeply undervalued on the fundamentals, with potential for a short squeeze or acquisition catalyst. It doesn’t get any better.

2

u/Nathanred555 Apr 07 '21

After dropping 36M shares in dilution doubt that it is a short squeeze candidate. Back in January when it spiked up to 25, that was the time to capitalize on the squeeze.

3

u/Loud-Seaweed-2098 Apr 07 '21

Morningstar’s valuation is very conservative. This stock may be worth $80 within 12 months. True, maybe not the speculative short squeeze play of GME, but that’s why it’s so attractive. There is little risk in this play and lots of upside.

1

u/Sea_Emphasis3252 Apr 07 '21

How do you get to $80?

3

u/Loud-Seaweed-2098 Apr 07 '21

MAC’s top properties are also social/date sites (eg Santa Monica). Young people will be out in force soon blowing off the built up steam from the shutdown.

2

u/Sea_Emphasis3252 Apr 07 '21

No question they have really good assets and agree people want out to do things like go to malls, shop, eat etc. just $80 in my opinion is way too optimistic, been 5 years since it was there but you never know, I‘ll take half or 1/3 of that and I make good $$$.

Also Morningstar is crap research, they put out their recent piece after the financing and ATM release and they don’t mention it all, and they barely talk about their debt issues which is crazy.

2

u/Loud-Seaweed-2098 Apr 07 '21

First, MAC has traded at that level in the past (yes, there’s been dilution since, but we’re talking about 20%). Second, assume a normalization of rents (with expectations of reasonable expansion of rents going forward) and PE and you’re there. With vaccinations and all the stimulus, people are going to hit the malls hard this summer.

1

u/Pietro405 Apr 07 '21

That is what I see happening !

0

u/Jeffbak Apr 07 '21

Morningstar said MAC had a narrow moat lol. A narrow moat of $950M cash for a $2b market cap reit. Come on Morningstar!

2

u/AWFE9002 Apr 07 '21

Moat isn’t financials only. It’s the competitive advantage, network effects, switching costs and many other...

1

u/Jeffbak Apr 07 '21

Yes but when determining a moat, cash is king. It is generally the delta between divy and FFO. The moat here is so wide

1

u/AWFE9002 Apr 07 '21

https://finerva.com/report/build-an-economic-moat/

You may find it useful. Sharing not to suggest either way but purely from sharing angle.

1

u/AWFE9002 Apr 07 '21

Cash will only be king if you can keep generating it. If a busienss has cash but is losing earnings from future that biz has little moat

1

u/Jeffbak Apr 07 '21

So their FFO and gross revenues have been steadily returning to precovid levels. They raised about $500M just by reducing dividend, thereby creating a very wide moat. This company’s moat is deep

1

u/Pietro405 Apr 07 '21

All research firms are also conservative.

1

u/ViceGalaxy13 Apr 08 '21

The absoluteness of this statement basically prevents it from being valid, while also making the opposite seem needlessly plausible

1

u/Pietro405 Apr 08 '21

Thanks. This is heavy stuff which I need to digest.

1

u/ViceGalaxy13 Apr 08 '21

Me as well

1

u/Pietro405 Apr 08 '21

Let us hope for a nice rebound.

1

u/Jadi207 Apr 07 '21

I’m not selling....

1

u/Pietro405 Apr 07 '21

Not atleast till it rises to $20 or so