If you've always wanted to buy some Alberta real estate but felt it was too expensive, Desjardins Securities may have found a backdoor solution in Melcor Developments Ltd.
The Edmonton-based company has 8,865 acres of undeveloped land in key Alberta markets, which Desjardins analyst Jeff Roberts suggests is worth more than triple its recently estimated value of $247-million. Mr. Roberts believes the shares are trading below book value, considering the historical price of real estate in the province and Melcor's income-producing portfolio.
"Clearly, Melcor's current share price offers an opportunity to buy Alberta land at a significant discount to value," Mr. Roberts wrote in a note to clients last week.
Mr. Roberts estimated the company's book value - the value of its assets minus its liabilities - plus its income-generating properties is $13.37 a share. Yet, the company closed trading last week at $13.30.
