Find hidden treasure

By Apostolos Manthos

There is a certain type of investor who likes to spend many hours looking at the stock values ​​of companies with turbulent fundamentals in the firm belief that there is a treasure hidden somewhere inside that can change their miserable situation. In fact, it is very likely that they think they know more than the real owners. After all, only they know where the treasure is hidden so that “when” it is revealed (if it is there, of course) they can … hit it.

I’m not saying, it’s a fun pastime to hunt for hidden treasure, but in the stock market there is also “time value”. Especially when the stock market in question has developed a great upward speed and leaves you stuck at the station with a shovel in your hand, still waiting to discover the buried treasure. Let there always be the possibility that what you only know is known “secretly” by many others and has already passed it on to the share price and upping the market value to where its disastrous financials can’t be justified.

The irony of the whole thing is that there are now healthy listed companies that will reveal their treasure to you, without much digging. In fact, he gave you the key to the “chest” to unlock your earnings. The example of the two companies that are currently trading for less than they are worth is typical.

The first is excessive activity in business deals Characteristics of Premia AEEAP (PREM), where it is trading so far, with the general index at 1,317 units, at 1,262 euros, while in the first half of 2023 it is very likely to find itself with an internal book value (NAV) at 1.70 euros. In other words, we are talking about a “treasure” percentage of +35%. And rest assured that the price of €1.70 will be written on the board because this very good property management company is climbing two by two steps to its real value.

The second is the only insurance company listed n interlife (INLIF), where it is also expected to net worth over €6.40 in the first half of 2023 at the same time it is trading at €4.40. Here the percentage of “treasure” approaches +45%.

But be careful, because the percentages of increase that we give correspond to net worth without adding to this the growth of economic volumes which is particularly positive for both companies that we analyze.

So starting from Premia properties Notably, the company is so active that it is not only managing 4 projects for 2023 and 2 for 2024, but is making exploratory steps for 2 others which will be discussed in depth. In fact, the very powerful project that is already being developed under the construction contract of ELEMKA of the Mytilineos Group and is expected to be completed in June 2024, the one that has a “green” office complex in Piraeus, with a budget of 50 million euros and a gross area of ​​26,500 sq. square meters, it seems as the days go by that he is finally able to generate more profits than he expected. A 12-year employment contract with AADE will bring more than 1,500 employees to the offices, while the number of monthly visitors will be several times higher. In addition to the 92 parking spaces it has awarded to AADE, Premia will have … 500 spaces available. So one can easily understand what the investment in question will give in terms of income. Big Mobility has also begun on the other big project, Skyline, in which Premia plays an active role.

It is also positive that the company will not increase its expenses because the recruitment made for employees from 2021 is able to raise up to a doubling of the real estate portfolio. So the company will increase its revenues while keeping its expenses low. This is the essence of profitability.

Schematically, the stock is now still focusing on its target, which is entering the fluctuation range from 1.47 to 1.68 euros. Also, the establishment of a strong base in the area of ​​1.25 to 1.27 EUR supports the passage of the price above 1.50 EUR.

We turn to Interlife, which has 2+1 parameters in front of it that could cut into its revenue as well as shareholder earnings.

The first criterion is the government’s great interest now in increasing insured property. The 10% discount on ENFIA announced by Prime Minister Mr Kyriakos Mitsotakis and which will become state law in the coming months for properties already insured or to be insured within 2023 may be the fuse to change the culture in property insurance. This step is expected to have a strong continuation on the part of the government, thus greatly enhancing the role of insurance companies. Let’s not forget that from 2020 onwards the state has paid more than 2.5 billion euros in compensation for damages caused by floods and fires, which means that there will be “pressure” to increase the “insurance awareness” of the Greeks. Imagine that only 15% of homes and 20% of businesses are insured with basic coverages (fire, flood, etc.) with most of them having to do so due to borrowing. Of the approximately 7 million private urban properties, only 1/7 is insured highlighting the scope for growth in this specific insurance market.

The second parameter concerns the gap that separates us from the European Union (EU) in terms of insurance coverage figures. Thus, there is a higher potential for revenue growth because Greece spends 6 times less money on insurance coverage as a percentage of GDP, compared to the EU average.

Here, the coming climate change, in addition to the imposed European “wisdom” pressures, will greatly highlight the urgent need to primarily insure property against natural disasters.

An additional parameter that will lead to quick and unexpected profits for shareholders is the immediate takeover deal. And of course the huge potential for growth has been set by some other powerful global players in the security industry. The Market is already talking about a strong Italian presence in the acquisition of Greek insurance companies. It should be noted that Interlife ranks 12th out of 31 companies active in the sector in terms of total outstanding production and is the only company currently listed on the Hellenic Stock Exchange. Also, the company is already operating in the first four months of 2023 with an increase of + 17.09% in total premium production against 10.2% of the market.

Finally, in the chart analysis, after the upward collapse of the long-term bearish “Q” pivot at €3.80, the stock seems to have started its way towards the first partial resistance area from €5 to €5.62. The fact is also of great importance which increases the trading volume.

* Apostolos Manthos is responsible for technical analysis and investment strategy