Peter Woo Kwong-ching, the chairman of Wheelock & Company and Wharf Holdings, has also been steadily increasing his shareholdings in Wheelock, a ports-to-property conglomerate. Between August last year and October this year, he spent about HK$434 million on Wheelock shares.
Based on its current share price, he would have reaped more than HK$190 million in unrealised profits.
Woo's purchases since August last year are his first share purchases captured by Hong Kong stock exchange records, which go back to 1993.
If Woo is buying Wheelock shares for the first time in a long time, he must think them undervalued. Is the stock still a good buy despite having almost doubled this year and near its highest levels since 1997?
Probably not, but to get to that view, potential investors should consider two points. First, look at how much Wheelock is discounted relative to the fair value of its underlying assets. This is the conglomerate discount.
Second, consider the percentage of Wheelock's value that is made up of its separately listed businesses. If nearly all of a conglomerate's worth consists of businesses that are separately listed, investors have fewer reasons to buy the shares of the parent. Better to buy the underlying stocks, getting closer to the profits and dividends of the underlying businesses.
