Analysts at Koyal Group claim Steel Partners Holdings L.P is a diverse small cap hedge fund that needs to receive serious consideration from investors.
Jul. 17, 2013 - TOKYO, Japan -- Analyst and Senior Vice President of Mergers and Acquisitions, Mr. Peter Keller, at Tokyo based equity research firm believes Steel Partners Holdings L.P (NYSE: SPLP) to be undervalued by nearly 40%. Steel Partners Holdings L.P is an international holding company with substantial investments spread across a range of sectors, including; defenses, banking, insurance, and education.
The company appears weaker on paper than it is in reality due to several primary factors, they have been strictly adhering to GAAP measures, there is a lack of confidence in the CEO who owns a large proportion of the business, and a wide range of investments in companies which are faltering and ugly.
The company was founded in 1990 by Warren G. Lichtenstein as a small cap activist hedge fund called Steel Partners II. From 1990 to 2008 the fund managed to return 700% for investors. But 2008 and 2009 were dismal years for Steel Partners II; they lost almost 50% of its investments as a result of the credit crisis. This caused Lichtenstein to covert the hedge fund from Steel Partners II to Steel Partners Holdings L.P.
Steel Partners Holdings L.P. defines its self as a “value investment company,” they buy controlling percentages of struggling companies, and then help them to fix their problems so the company can be resold for a profit at a later date.
Shares of Steel Partners Holdings L.P. currently trade at $14.30, they are increasingly profitable, have a diverse range of investments, and a focus on investor´s interests and providing a safety net for investors.
The company has grown about 8.5% annually, which is heavily influenced by sales, purchases and dividends from long term investments. The management´s operating policy targets long term investments and an annual increase in average return on equity should be expected in the next few years.
Koyal Group Finds Diamond in the Rough