Panther's shares have come a long way in the last year. But they're still too cheap.
Property developer Panther Securities (LSE: PNS) shares have risen by more than 50% since I pointed out the company's inherent value a little less than a year ago. Surely then, such a rise has seen the value suitably outed and it's time to look elsewhere?
Not a bit of it, given the ability of Panther's legendary Chairman, Andrew Perloff, to steer his ship so ably through whatever storms England's economic environment comes up with.
The Chairman's rambling
Why "legendary"? Well Mr Perloff is well-known for his "Chairman's ramblings" whenever his company announces its results. They really are worth a look even if you have no interest in Panther's shares -- and usually involve him wittily criticising the inanities of Government policy down the years.
With the results for the half year to the end of June, for example, Mr Perloff tells the tale of his father saving a dog's life. The poor creature had been run over and needed lots of 'liquidity' and a large quantity of drugs to 'quantitively' ease his pain, before going on to bite his father's hand. You get the picture...
But the results are also worth a look from a hard-headed investment point of view. They show a company making steady progress in building value which isn't sufficiently recognised in the share price. The company is famously frugal (the Chairman waived his salary last year) and has an admirable reputation for putting the interests of its shareholders first; all too rare a trait today, sadly. Perhaps this is because the directors have decent stakes. Andrew Perloff owns a quarter of the company and other directors were buying at 337p in December.
Shrewd deals
The company made good progress helped by some shrewd deals. Rents receivable during the period amount to £3.8m compared to £3.5m the previous year.
The overall net asset value (NAV) stood at £71.6m, and included cash of close to £14m, yet at the current price of 322.5p, Panther is valued at £54.4m. Such discounts certainly aren't rare in the property sector, but it looks too large a discount given the company's track record.
Since the interims, Panther has sold its interest in a real estate investment trust for £2.4m, as well as two other properties, and taken a near 20% interest in department store group Beale (LSE: BAE) at 40p per share. In addition, Andrew Perloff owns almost 10% of Beale shares in his own name. Quite how this move will pan out remains to be seen, but if Mr Perloff's track record is anything to go by, he's seen an opportunity to extract some value both for Panther and for himself.
Beale has 11 high-street retail department stores across the UK, in Bedford, Bournemouth, Horsham, Kendal, Poole, Tonbridge, Winchester, Worthing, Southport, Yeovil and Bolton.
Long-term trustworthiness
Panther says it's planning to continue quarterly dividend payments of 3p and that this could be increased when market conditions improve. Until then, the yield is a respectable 3.7% as things stand. We'll find out exactly how things have been going at the end of April with 2009's final results. If nothing else, you can rest assured they'll be an entertaining read.
Overall, Panther strikes me as a good long-term investment for those who trust Andrew Perloff and his team's judgement as a safe pair of hands. The good discount to NAV, strong track record, reasonably good yield and frugal approach should steadily reward investors in the years ahead.
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