 Good day, fellow investors! Today I'll share my full analysis, some of part's value in detailed analysis of the Argentinian conglomerate Cresud. So on one part we have a leading Latin American agricultural company with 800,000 of hectares of land across Argentina, Brazil, something in Uruguay and Paraguay. So they are really focused on agriculture and that's one part of the company. They have 31 farms across the region, they are developing those farms, they are selling when they are developed and trying to find the best return on investment. However Cresud is really not just about farming, there is also Irsa. It is a real estate company that owns the Laulau Hotel, the most expensive hotel in Argentina, Banco Hipotecario, the lipstick building in Manhattan and a lot of investments in Israel, real estate, the largest supermarket chain in Israel, cellcom, telecom, whatever. Then there is Irsa, another subsidiary, office buildings, premium office buildings in Buenos Aires, malls, 16 malls, the best avenues of Buenos Aires. So really prime, prime real estate properties. But that's not all, it's huge growth story, there are huge growth opportunities to invest some land to build new malls, new offices. So the company has been really growing over the next 20 years and will keep growing even more. This is an example of what they have in plan to build on the 70 hectares land that they have in prime location in Buenos Aires. So let's dig into each part, agriculture, Israel, land, whatever to see what is the value of this company and where can this lead us. Let's see. So this is the structure of the company, you can see farmland and then Irsa with real estate. So let's first look at another, take another better look at the farmland, the value there and then at the real estate segment. So a lot of farms as said 800,000 acres across Latin America, huge production of corn, wheat, cattle, all the things that feed the world, as they said. Here is their strategy, they buy land, develop that land, create it into highly productive, highly yielding land and then they sell that land. For now it has led to an internal rate of return of 16% but they always sell the most expensive land with the lowest yield. So those are really cherry-picked sales. From a value perspective, I have estimated the value of Brazil Agro, the company that is traded on the New York Stock Exchange that Cressi owns 43.4% of the market cap is 200 million so their stake is 84 million. I think that's a fair value so the value in Argentina is a little bit more valuable so I would put the value there of 250 million to sum up with the other land. We are at 350 million in the value for the land bank and I think it's a fair value because nobody's going to buy that in one hand so catalyst will be slow development, slow sales and they are making about 50 million of profits so discount that to 15% returns and we are then again at 350 million. Just to note here I'm analyzing Cressud from a perspective okay I want 15% returns. If you want lower percent returns just calculate the difference and you will see how Cressud value grows. It's a great company but I'm looking for 15% given the current situation in Argentina and current yields and discount rates there so keep in mind when I'm discussing if you want 10% Cressi is definitely a long-term buy. Brazil Agro is one of the largest companies in terms of arable land so here is the summary a lot of hectares and then we go to the book value of the company. According to the company and Deloitte that made an analysis the book value is 1.4 billion of the land and that would lead to an asset value per share of 24 which is double the real book the current book value but that is because of currencies as the Brazilian currencies got devaluated lately. However when we know that those farms are cherry picked those farms are sold like that that it takes a lot of time to sell those farms because sales are not that fast we are talking 22 Brazilian reals per share or six dollars per share the counting is lower 3.4 when you discount that to a 15% return then you get to the current stock price so I think it's a fair value for Brazil Agro. So the land let's put 350 million on that and let's see what's next. Now Cressud owns 63.8% of Irsa while Irsa owns 86.3% of Irsa commercial properties that I have analyzed in a video separately here so I'll put at the end of this video I'll put that video again or just click on the link above in the cards and you can see that video. So this is what we have to analyze and there is Irsa commercial properties my fair value for Irsa's stake in the commercial property segment was 700 million valuing the company at 800 something million for again a 15% return 10% and that immediately jumps significantly higher there are some hotels there is a land bank for use and there is international condor a reed there is the lipstick building that they own 49% in new york and then is there are israeli operations where they also own the HSBC building in new york and the Banco Jicapotea cario of 40% stake so a lot of value there let's see one by one what there is hotels great free hotels in Buenos Aires Intercontinental Sheraton Libertadol Liao Liao the most expensive hotel is in Argentina and I have found JLL's research showing recent transactions for similar hotels more expensive hotels so Sheraton Hotel Park Tower got $333 per room per key and as the Intercontinental are prices from what Irsa owns are half the Sheraton and one-fifth of the four seasons I would give it of a value of around 50k per room 309 rooms I get 15 million or 11 million for Irsa's share same calculations for Libertadol and Liao Liao make it that Irsa's stake in those hotels is about 25 million because they don't own 100% not much not much there but just nice to make a calculation for the hotels now the land bank this is what most bullish investors on crest would expect to give the highest value and unfortunately I will have to disappoint them a little bit so Solaris de Santa Maria is a 70-hectare property facing the Rio de la Plata in the south of Buenos Aires the development project involves residential complexes offices stores hotels sports sailing clubs whatever you can see here on the picture they really plan it big however the plan was presented back in 2002 and still nothing happened since then we are now 16 years ahead of that there were some issues with legislators still pending 2017 there was a vote for the approval that was missed by one vote so it didn't work but now the plan is that there will be a new urban code in Buenos Aires nuevo código urbanistico that will approve it or allow it with some changes and the changes are very intriguing I checked the code this is the plan the map in the new code new draft of the code u73 and then I went reading and I saw okay area edificable area is 30 percent for u73 and they can build buildings high 12 plus 15 meters 15.5 that's 27 meters average 4 meter as it has to be luxurious per story I get to 7 6 7 stories parking and whatever comes in there so that's one so low race buildings and then on the high race buildings here they say that 1.5 percent of the edificable area will be without limit so 1.5 percent of 21 hectares on the 70 that is the edificable area gets me to 3.1 hectares or 3100 square meters of high race buildings at 40 levels it is 100 000 square meters to be built plus if we add 150 000 from what can be built on the lower square buildings I get to about 200 000 square meters to be built let's say 25 percent of that goes to holes and whatever elevators terraces and whatever I get 150 000 square meters to be built if I multiply that by let's say luxury 4 000 that gives me 600 million in value of what can be built there 600 million in value if I take a 15 percent profit margin for crescent over 10 years if that gets approved I get to a value of 100 million for this land bank over the long term so if I discount that I get to 50 million now there will be some changes perhaps they will enable it to make more so I will put a value of 100 million max on that some people I have seen go to 700 800 million on the value but I don't think that crescent will be allowed to build 18 high-rise buildings they might be able to build five high-rise buildings and here is a big difference in land values so I get 100 million for the land bank other properties Puerto Retiro there is 8.3 hectares so I'll include that in the land bank operations in Uruguay purchased at 2009 for 9 million so they should be worth at least 20 million then let's go to international the Israeli company and the other holdings when you look at the operation center in Israel that was divided on two companies and there is a lot of net debt 960 3 million and 747 million dollars now the good things about all these companies is that they are all traded on the Israeli stock exchange or in New York so I simply looked at the values at the market caps of all these companies summed them up and got to the value of what would be Kresuz, Irsas holding there in Israel so the EDBD part, KLEL insurance they own 44.8% of that the market cap is 850 million their ownership should be now 295 million so around 300 million plus there are some other equity stakes in smaller companies from EDB and EDBG I get that to 40 plus 30 70 million EDB value of the assets 365 million then we have SELCOM 542 million market cap value for the company 227 million property building corporation value market cap 500 million 324 Irsa Schufer Sahl 1.5 billion 780 million for Irsa Elorone 160 million market cap 58 is the value the sum of it all of the market caps is 1.3 billion if I take off the net debt on the holding company I get to a value of 50 million now if those companies can be sold at the premium then here the value really grows and here is also one expectation of the unlocking on value it's hardly unlikely that they will lose value there they invested already 500 million in those debt securities so that's how they got the value but then my play is why would I buy Irsa or Kresuz why I don't simply buy stakes on the Israeli stock exchange in those companies and I get direct unlocking of the value so if you want to invest in Kresuz in that unlocking catalyst then you might buy those stocks on the Israeli stock exchange their plan is to sell them at a premium so you might see 50 100% gains there immediately if you buy Irsa then those that money might go into different projects paying off the debt who knows what they will do so if you want to play on that perhaps it's better to buy the subsidiaries and play on individual place perhaps you can get the money there directly and then invest for some other unlockings of value interesting play now just an example of the valuation why people see it as a great value the HSBC building in New York that's owned by property and building so they own it which is also something that omits is omitted from the value is at 900 million but the value is there and has been appraised so high but there are leases there are contracts there are land issues so many things that it's really difficult to get on the bottom of it however there is value so another building that they own 49% of it lipstick building with the mortgage with what they own also huge value there I estimated the value if they pay the the debt the rent whatever they have we get to 100 million for sure 28% in condor read if they sell it at market values there is another 35 million Banco Hippotecario their 30% 300 million us dollars market cap 30% is 100 million in value so the total value of Irsa comes to 834 million 1.1 billion in value of the assets minus 342 of company holding debt is 834 million the market cap is 1 billion so it is a little bit overvalued for me as said I'm looking for really high returns so that's my analysis on Cresud a very complicated company a lot of time it will take a lot of time for all the value to get unlocked and then you never know what will the CEO then do again with that money so that's a discount Argentina is at a high discount that debt that he bought in Israel is also was also at a high discount so a lot of debt there are a lot of issues there so a lot of work there and these companies that's why I like the company I'm keeping an eye on it but if there is a recession in the next one two three years this will be extremely cheap because of the leverage because of the perception because of emerging market exposure so I think it will do great over the long term if you want just to park your money in real estate for 10% over the long term not care about ups and downs I would recommend this company but if you have to be ready to buy more when it's really cheap I am a more enterprising aggressive investor I really wait for it to be cheap which is not at the moment thank you for watching I'm sorry if I disappointed you but there will be more analysis so might we might find something better I'll see you in the next video