Value Ideas Blog
Reading Recommendations and ShortUpdate Hornbach
In the last few days we have seen a really interesting development for Hornbach which is one of our holdings. In our analysis we had written that we assume that Praktiker will go bankrupt and the Sales of the Praktiker stores will be divided (in three different scenarios) under the main competitors. At this time Max Bahr was not included in this calculation because of the fact that we have two different bidders who like to takeover all remaining MaxBahr stores. In the last two weeks both bidders cancelled their offers, now MaxBahr is also bankrupt and the different stores are sold store by store to different competitors. So far Hornbach only bought two stores of about 60 sold stores, each store is bigger than 11.500m² and again you see how observing this management is. We think this development is positive for our estimation and will slightly increase our margin of safety for Hornbach. You can find a daily updated list of all sold stores here.   Furthermore we have some weekly links and quotes for you:  
  • A very good article from Jeremy J. Siegel (Professor of finance at the University of Pennsylvania`s Wharton School) from 2009 on Efficient Market Theory and the Crisis. If you compare it to todays data and his implications you can paint your own picture. Here are some highlights from his article: The Shiller Home Price Index is up 13.29% over the last year vs. an increase of 1.0% of the consumer price index while median household income fell for the fifth straight year in 2012, to $51,017. That was the lowest annual income, adjusted for inflation, since 1995.
  • Very good blog from Phil Birnbaum, and one big key to take with you: “First, concentrate on eliminating bad decisions, not on making good decisions better.”
  As always, if you think you have something we should read or some own thoughts feel free to write us or leave us a comment!

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