;

Hammerson

28 March 2021 By PDSNET

Hammerson has been listed on the London Stock Exchange since 1945. It is a real estate investment trust (REIT) and owns “flagship destinations and premium outlets in key cities across the UK and Europe”. Most of the company’s properties are shopping malls like Brent Cross in London, The Bullring in Birmingham and Dundrum Town Center in Dublin. Obviously, these retail outlets were already affected by the protracted Brexit negotiations when the pandemic began.

All in all, 2020 was a terrible year. The company reported an IFRS loss of GBP1,7bn and rental income down 41% on a like-for-like basis. Its tangible net asset value (NAV) fell by 26% to 82 pence per share after the rights issue – which should be compared to its current share price on the JSE of 705c. The company had a loan-to-value of 46% at year end. Obviously, much of the 2020 loss was due to the downward re-valuation of the company’s various retail outlets. That loss should be recovered once the UK vaccination program is complete. Undoubtedly, there will be some loss of custom to online shopping which will not come back, but the book value of the company’s properties is now probably excessively conservative.

Add to this the fact that Resilient’s Des de Beer is the CEO of Resilient, and a director of Lighthouse and Hammerson. Lighthouse owns 15% of Hammerson and is its second largest shareholder. We know that Resilient owns a chunk of Nepi Rockcastle and shopping malls in various European cities. With Hammerson trading at a significant discount to its NAV and the UK rapidly getting on top of its vaccination program, it might make sense for some kind of merger between these three companies to be in the wind. Consider the chart:

Hammerson (HMN): 9th October 2020 - 19 March 2021. Chart by ShareFriend Pro.

 

This chart shows a standard candlestick chart at the top, an on-balance-volume (OBV) chart in the middle and a volume histogram at the bottom with a 30-day simple moving average superimposed. You can see here the steep rise in the OBV from about mid-February 2021 which shows that a large investor is accumulating Hammerson shares. This is a classical insider trading pattern – large increases in volume accompanied by incremental increases in price.

The slight sell-off over the past four trading days is probably some profit-taking, but you will notice that it does not overwhelm the previous 16 trading days of steady accumulation. To us it looks very like the strong hands are buying and the weak hands are selling.

If there is a plan afoot for some kind of merger activity involving Hammerson, then it looks as if someone with deep pockets is quietly picking up whatever shares they can before the news is made public.

Hammerson owns some excellent retail outlets and is trading at less than half its NAV. If retail is expected to improve in the UK, then it should be a potential takeover target.


DISCLAIMER

All information and data contained within the PDSnet Articles is for informational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet Articles are based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any comment or opinion for any reason.



Share this article:

PDSNET ARTICLES

The Confidential Report - December 2021

America

The US economy is still booming. Weekly jobless claims, for the week ended 20 November 2021, fell 71 000, while consumer spending jumped 1,3% in October month alone. Third quarter gross domestic product (GDP) came in at 2,1% - hammered by supply constraints, but above analysts’ expectations. Unemployment has fallen to 4,6% and

Transaction Capitals Trendline

In last week’s article on Grand Parade, we drew your attention to the importance and usefulness of downward trendlines (drawn above a downward trend) in establishing the best point to buy a share. This week we draw your attention to the benefit of upward trendlines (drawn below a rising trend) as a method of determining when a share, with a strong rising trend, has corrected

Grand Parade Trendlines

Technical analysis, which is the search for and analysis of patterns in share price charts, can become very complex and mathematical. Literally thousands of line indicators have been developed which claim to improve the investor’s probability of being right when determining the moment when a share’s price turns. In our experience, the

Private Investor Advantage

Finding winning shares is not just about looking for quality. It is about finding quality when it is cheap – which usually means finding it when it has fallen heavily and is out of favour with institutional fund managers. We advise you to look for the “mountain behind you” in the chart.

As a private investor

New Record High

As we predicted, the S&P500 reached a new all-time record high on Thursday 21st October 2021 at 4549.78. This officially means that the correction that it was going through is over. That correction took the index down to a closing low of 4300.46 (on 4th October 2021) – which is a 5,2% decline from the cycle high of 4536.95

Hulamin - Insider Trading

In our opinion on Hulamin, last updated on 3rd September 2021, we noted “What is noteworthy about this share is that it has a net asset value (NAV) which is more than 3 times its current share price making it a possible takeover target”.

On Thursday last week the company issued a bland “cautionary” notice

Calgro-M3

Calgro used to be the darling of the institutional investors. Every fund manager in South Africa was buying the share and it rose dramatically from as little at 50c in February 2011 to an intraday high of 2275c on 11th August 2015. At this point it had a market capitalisation of R2,8bn and was trading on a price:earnings (P:E) ratio of

The Confidential Report - October 2021

America

The S&P500 is in a correction which began after 2nd September 2021 when it made an all-time record high of 4537. Since then, it has fallen by as much as 249 points to an intra-day low of 4288 on Friday (1/10/21). This correction has taken 20 trading days and amounted to 5,4% at its worst. There are a variety

Context

The context within which a chart is viewed is vital to your understanding of it. In this article we will attempt to show the broader context within which we view the market action which took place last Friday.

INTRADAY

Let us focus our attention on the S&P500 index, which is a weighted average of the