$M $AMZN venerable department store concern Macy
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Posted On: 05/05/2017 3:03:11 PM
$M $AMZN venerable department store concern Macy’s (NYSE: M) has fallen on hard times, and the stock has been cut in half from its highs in the second half of 2015. Sales are slowly declining as it struggles to compete against online retailer
Amazon (NASDAQ: AMZN), a common affliction across the retail space.
However, the company is solidly profitable and should post around $3.00 a share in profits this year. In addition, the stock pays north of a 4.5% dividend. Most importantly, the company’s hundreds of stores sit on some very valuable real estate that has a recorded book value from decades ago.
Macy’s flagship store in Manhattan sits on an entire city block and is
worth $3 billion to $5 billion just by itself.
The company enterprise value is just $17 billion including debt.
This discrepancy of value has brought in activist investor
Starboard Value which has prodded the company to start to monetize
some of that real estate value by selling off some underperforming stores.
Canadian-based retailer Hudson’s Bay approached Macy’s about a potential takeover last week. The stock does look significantly undervalued here with a potential catalyst on the horizon.
Amazon (NASDAQ: AMZN), a common affliction across the retail space.
However, the company is solidly profitable and should post around $3.00 a share in profits this year. In addition, the stock pays north of a 4.5% dividend. Most importantly, the company’s hundreds of stores sit on some very valuable real estate that has a recorded book value from decades ago.
Macy’s flagship store in Manhattan sits on an entire city block and is
worth $3 billion to $5 billion just by itself.
The company enterprise value is just $17 billion including debt.
This discrepancy of value has brought in activist investor
Starboard Value which has prodded the company to start to monetize
some of that real estate value by selling off some underperforming stores.
Canadian-based retailer Hudson’s Bay approached Macy’s about a potential takeover last week. The stock does look significantly undervalued here with a potential catalyst on the horizon.
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