Jan. 28 at 1:45 PM
$CBL "I value CBL shares at
$40-45. At
$28, CBL trades at an attractive discount to fair value, but I am also attracted by the low downside risk. The company has almost
$9 per share in excess cash and owns a collection of properties totally unencumbered by debt. These properties produced
$66 million in 2023 cash flow. At 7x cash flow, these properties are worth another
$15 per CBL share. Together with the cash, that’s value of
$24 per share before considering any of the debt- encumbered properties. And there is plenty of value there, too. Some of CBL’s properties are owned by a holding company that carries a term loan of
$730 million. As long as these properties are worth more than 5.5x cash flow, CBL’s equity in the holding company has value. CBL also has numerous properties with non-recourse property debt. Some of these properties are not currently cash-flowing for CBL because their cash flow is insufficient to satisfy their debt service ratios."
Full text:
https://seekingalpha.com/article/4752510-alluvial-capital-management-q4-2024-letter-to-partners
