Gevelot's hidden value is exposed












For those interested here is their press release
Here is the latest annual report
(Both in French)

Disclosure: Long ALGEV


  1. but if they flip Kudu, won't they once again lose their distribution in Canada?

    1. Mike,

      That was my thought as well, unless they stipulate a new contract as part of the sale. That's my guess for what they'll do, they will ensure that the buyer is friendly and they have an attractive distribution deal.


  2. If they're so sure they can re-sell Kudu for more, why wouldn't that end buyer just circumvent the middleman and buy it now?

    1. Maybe they couldn't buy it without Gevelot's approval. Their 45% could block a sale.

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  4. An interesting situation. I'd be inclined to sell. I respect your point of view that management know more about the situation than we do, but equally management have career risk. They may need to own the distributor to keep enjoying jobs that they like, even if it's not in the best interests of shareholders.

    Would you buy these shares today, if you'd just come across them? Perhaps not?

    Just food for thought. Like your blog btw, and admire your whole esoteric approach!

  5. Great article. Interesting in that hidden assets can be found in big NYSE stocks too. Take Corning Glass (GLW), they own 50% of Dow Corning, a $6 billion sales company, while Dow Chemical (DOW) owns the other 50%. Nobody seems to talk about it, or notice, but why doesn't anyone put pressure on GLW to sell or spin-off their ownership - at least ask Dow if interested???? Even if GLW could get one times sales, they would have over 10% in market cap value, pre-tax. Because it would be a control situation, maybe Dow would pay more if interested. Instead, there is this hidden asset simply paying dividends to the 2 owners. It's all there in the GLW 10-K towards the back. Dow Corning shows high capital expenditures pre-2013, then cap ex below depreciation and amort in 2013 - very interesting. Dow Corning announced their Q1 2014 earnings and showed a big increase too. Sometimes hidden assets are right there in front of you, but the stock of the holder of the asset may not be cheap enough.......yet!

  6. Some of statements not true. i.e. kudu didnt act to cutoff first but it occurred other way around

    1. Do you mind elaborating? So Gevelot cut off Kudu? If so why did they then acquire them?

    2. both partners couldnt agree since shareholders also used to be competitors. So, one side (whose decided to cutoff first) did want to kill other. Meantime, they made money too..

  7. Seems like they indeed flipped Kudu:

    Question now becomes what they do with all the cash...