Italian shipowner Emanuele Grimaldi says his decision to double his stake in Hoegh Autoliners reflects his belief that the company is massively undervalued.
And he has played down his influence after becoming the second-biggest shareholder in the Oslo-listed company with a 10% stake.
Grimaldi’s purchase led the stock price to jump by up to 6% on Tuesday, but not too much should be read into that regarding his future ambitions, the shipowner said.
His own assessment is that the capitalisation of the Norwegian car carrier as a multiple of earnings is out of kilter with reality.
“Just to explain, this company is making $700m of cash flow and profit. And it’s worth only $2.2bn,” said Grimaldi.
“As far as I’m concerned, this is a mystery. Why is this [the value] so low?”
That philosophy explains why Grimaldi doubled his stake in the company from 5.1% in April.
Grimaldi praised Hoegh’s investment in its fleet, its long-term contracts and top management led by CEO Andreas Enger.
Enger has done “a fantastic job by looking outside the box” on decarbonisation, while the Hoegh family, who control 41% of the company, are “a very serious and capable family”, he added.
“So really, I am making the investment because I think that I am making a very good investment,” said Grimaldi.
To cap it all, the Oslo-listed company paid very high dividend payments that were “absolutely unique”, said Grimaldi.
Grimaldi said that he had “zero influence” over the company, even if he now possesses close to 20m shares in the Norwegian car carrier firm.
Even if he might meet management from time to time, he had no direct relationships.
No direct ties
“I don’t even have one independent director on the board,” Grimaldi said. “I’m just reading the result as much as you do, like everybody else.”
He also played down any suggestion that his company might look to stage a repeat of events in December 2023.
Then the Italian shipping company looked into purchasing around a 20% stake in Hoegh Autoliners that was previously held by AP Moller-Maersk.
“We are not at all looking at the takeover of anything,” Grimaldi said.
“I am a shareholder and I think that this company is probably one of the best investments you can do today.”
“It is still a very, very good opportunity to buy,” Grimaldi said.
If the company was in any other sector — luxury goods or logistics — the value of the company as a multiple of earnings would be much higher.
“Only because it’s shipping, it’s only three times. But this is a business long-term, it’s not a cyclical business.
“I think this company, like mine and others, we have long-term contracts with manufacturers.
“And I think that they are doing all the right things to have a better and better fleet.
“So I think I made a very good investment and I’m looking forward to seeing the result in the future.”
