The inaugural Booth-Laird Equity Conference hosted by LSU’s E.J. Ourso College of Business and Department of Finance was held on April 12, 2013 at the new LSU Business Education Complex. At the conference, Jonathan Booth, CEO of Booth-Laird Investment Partnership, closed the conference by presenting his best investment idea at the time – Volkswagen via Porsche SE.
Volkswagen was “out-of-favor” due primarily to fears over the European sovereign debt crisis and over recent negative commentary by the Chinese state-run media. We felt that the fears were overblown in terms of the potential impact to Volkswagen, allowing the opportunity to purchase a well run company at significant discount to intrinsic value with limited downside potential.
Further, Porsche SE offered an even better investment opportunity. Since selling its operating subsidiary to Volkswagen, Porsche SE was just a holding company that had two assets: 32% of Volkswagen’s stock (51% of its voting rights) and ~$2.6B in net cash. Porsche was selling at a 25+% discount to its net asset value, indicating the opportunity to purchase Volkswagen stock at a 25+% discount to its prevailing stock price at the time.
See Jonathan’s presentation on Volkswagen and Porsche SE below.Download Presentation