June was a good month. In addition to a strong market, several portfolio companies provided positive news.
DaVita at last won approval from the US authorities to sell its hospital business. The deal was announced back in 2017 but the approval process has taken time, leading many to start doubting whether it would be approved at all. I am very positive about the sale, in which DaVita receives around USD 4.5 billion for an unprofitable business. It is no wonder that the share is up 26 percent since the deal was completed.
Howard Hughes Corp is a somewhat unusual and overlooked real estate stock that we have owned since 2017. It has been a little frustrating to see the gap between the share price and my estimated value increase over the past year. I think the company is worth at least USD 160 per share, but have only been able to watch as the stock dipped to USD 92 at its lowest. Fortunately, the management of the company has tired of the incorrect pricing and, in June, it was reported that they had hired an advisor to sell all or part of the company. Its share price has since risen by 40 percent. However, I still think the company is undervalued and believe that an eventual selling price will be higher.
Finally, we have received the first good news from Bayer for a long time. First of all, there have been indications that the damages it may pay will be reduced. This would probably mean that future settlements will be lower than previously assumed. In addition, it was reported that Elliott Management, a successful hedge fund, has made a large investment in the company. Elliott said it believed Bayer was worth at least 50 percent more than the current price. Oddly enough, this had a greater effect on the share price than the news about the damages.
Carnegie Global rose by 6.0%.