Third Avenue Management, an investment management firm, published its “Real Estate Value Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of the calendar year, the Fund generated a return of -7.40% (after fees) versus -3.79% (before fees) for the Fund’s most relevant benchmark, the FTSE EPRA NAREIT Developed Index. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Third Avenue Management Real Estate Value Fund mentioned AMERCO (NASDAQ:UHAL) and explained its insights for the company. Founded in 1945, AMERCO (NASDAQ:UHAL) is a Reno, Nevada-based insurance company with a $10.4 billion market capitalization. AMERCO (NASDAQ:UHAL) delivered a -26.78% return since the beginning of the year, while its 12-month returns are down by -10.41%. The stock closed at $531.78 per share on April 27, 2022.
Here is what Third Avenue Management Real Estate Value Fund has to say about AMERCO (NASDAQ:UHAL) in its Q1 2022 investor letter:
“Held in the Fund since 2018, AMERCO is widely recognized as the leader in self-moving in North America through its U-Haul subsidiary where it has an unrivaled network with approximately 176,000 trucks, 126,000 trailers, and 46,000 towing devices available across more than 23,000 locations. What is not as widely recognized, in Fund Management’s opinion, is that the company’s forward thinking management team has also spent the last decade assembling one of the largest self-storage portfolios in North America-not only solidifying the “moat” around its core business but also creating substantial value in the process.
Due to these efforts, AMERCO owned and managed more than 73 million square feet of self-storage facilities at the end of the 2021, placing it as the third largest owner of such properties in the US. Notwithstanding, the company does not seem to get much (if any) recognition for this transformation. To wit, if one were to apply the implied price per square foot for AMERCO’s closest comparable on the self-storage side of the business (e.g., Life Storage), they would arrive at an implied value for its impossible-to-replicate self-moving business of basically $0- despite it generating more than $1.0 billion of operating profits per year more recently, implying $7-8 billion of value based upon comparables within the rental segment.
This disconnect does not seem to be lost on Chairman and CEO Edward Shoen (who owns 42.7% of the company’s stock along with beneficiaries). In fact, in response to a question about the price-to-value discrepancy during the company’s most recent quarterly conference call, he remarked that “it’s a question that is regularly discussed at the board level” and that “hopefully we’ll have some news for you before the year is out.” In the meantime, AMERCO is not only continuing to self-finance the expansion of its self-storage portfolio with more than 7 million square feet of projects in development, but the company is also expanding its “U-Box” offering as it gains further market share in the portable storage and moving segment.”
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Our calculations show that AMERCO (NASDAQ:UHAL) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. AMERCO (NASDAQ:UHAL) was in 29 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 25 funds in the previous quarter. AMERCO (NASDAQ:UHAL) delivered a -9.60% return in the past 3 months.
In August 2021, we also shared another hedge fund’s views on AMERCO (NASDAQ:UHAL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
