Italian Berkshire Hathaway? A look at the Italmobiliare share$ITM (-0.3%)
Italmobiliare S.p.A., an Italian investment company, is currently attracting a lot of attention - and not without good reason. With an impressive share price increase of over 40% in six months and seemingly considerable untapped potential, Italmobiliare is sometimes referred to as the "Italian Berkshire Hathaway". But how justified is this comparison with Warren Buffett's legendary holding company?
Business principle and strategy: not just a buy-and-hold approach
In contrast to Berkshire Hathaway, Italmobiliare takes a more active approach that is more reminiscent of private equity investments. The southern European investment company focuses on medium-sized companies with high development potential. As part of its strategy, Italmobiliare supports its investments not only financially, but also in terms of personnel and strategy in order to maximize their growth. As soon as the potential has been largely exhausted, the company considers selling the investment and uses the proceeds for new investments.
Growth and value enhancement
A look at the share price performance in recent years shows a positive trend. Since Italmobiliare was restructured as an investment company in 2018, the net asset value (NAV) has increased by 9% annually. This growth roughly corresponds to the average return of a broadly diversified ETF. Adjusted for the cash ratio, an annual increase of around 11-12% was even achieved. This approach differs significantly from the passive approach of Berkshire Hathaway, where the focus is on long-term ownership. Italmobiliare's holdings have an average holding period of less than four years.
The largest holdings: Caffè Borbone, Santa Maria Novella, Tecnica and Italgen
Italmobiliare makes targeted investments in companies with particular strengths and growth prospects:
- Caffè Borbonemarket leader in the coffee capsule sector in Italy, with sales growth of 14% and an expected EBITDA margin of 30%.
- Santa Maria NovellaA luxury company with over 800 years of tradition, which has almost doubled its turnover by expanding into Japan, London and Paris.
- Tecnica Group: The brand for outdoor products such as hiking boots and winter boots, which aims to benefit from the growing outdoor trend.
- ItalgenA renewable energy supplier that plans to double its capacity from 75 MW to 155 MW in the coming years.
Valuation and market positioning: A high discount to NAV
The Italmobiliare share is currently trading at around EUR 33.30, which corresponds to a discount of around 36% on the NAV of EUR 52.10 calculated by Italmobiliare itself. Analysts who make their own calculations also confirm the valuation potential, but estimate the fair value more conservatively at around EUR 42.20. The reasons for the discount include the typical disadvantages of an investment company, such as management fees and the risk of expensive wrong decisions.
Financial strength and dividend policy
One of Italmobiliare's major strengths is its robust balance sheet. The holding company currently has a net cash position of EUR 300 million, which corresponds to around 21% of its market capitalization. With this solid base, the company pays out a generous dividend of EUR 3.00 per share, which corresponds to a yield of around 9%. This shows that Italmobiliare not only increases the value of its investments, but also allows its shareholders to participate in its success.
Conclusion: A fast-growing hidden champion
Italmobiliare has positioned itself as an investment vehicle for entrepreneurial investments and as a brand building company in Italy. With its active management approach, the company stands out from passive buy-and-hold investment companies and offers considerable potential for value appreciation. Despite the recent price increase, the share still appears undervalued and could offer an attractive opportunity for long-term investors interested in the Italian market.
