Recently I’ve been looking at building a position in Exor. Its the holding company of the Italian family that owned Fiat and is trading at a massive discount.
What I like about Exor is it’s a double-whammy: a great asset and a discount. Their largest asset is a €13B stake in Ferrari, which was spun out from Fiat in 2016.
Ferrari (traded under “RACE”) is an expensive stock, but trading below previous highs by 20%+ and benefiting from the rich getting richer and from the appreciating value of scarce assets. It’s also reeling from bad press around its new EV. I really wanted a position in it which led me to Exor.
Exor has other holdings, including €4B in CNH Indistrial, €4B in Phillips, €1,85B in Stellantis, and €1B in Iveco group as per my analysis. The more important thing is that the NAV of its holdings is €32.5B while the EV of the holding company is €15.6B. The Ferrari holding alone is worth €13B, almost the value of the whole holding company.
One issue is that holding companies often trade at a discount, sometimes quite significant. The management of Exor seems to be trying to combat this with a buyback of €500 million that was just announced. While this might be too small, it makes me more interested in the company because it demonstrates intent to narrow the discount; I could see them selling stakes at market price and using that money to buy back their own stock at a 50% discount. Certainly that’s what I’d be recommending if I were their CFO. But hey I’m just some guy on Reddit.