Boral's an Iceberg, but the right kind.

Why are Boral shares trading below the Boral Board's valuation?

More importantly; Why are Boral shares trading far below their real value?

Boral have been ripe for a takeover for a long time given a lot of factors. I am not an overzealous shareholder, or the only person who takes this view, Alan Kohler's assessment of Boral last year pointed to the significant value in Boral's property portfolio and the strength they have in the stranglehold position on Australian construction industry resources.

With Zlatko Todorcevski on board, Boral have now made some moves to free themselves from underperforming debris, a are slowly presenting a leaner operation which will drive profit in the short term and position it better than most businesses the far side of the pandemic.

None of this should be news to anybody who cares to scratch the Boral surface, but it is important to be aware of the real value of your shares versus what's being touted by Boral and offered by Mr Stokes. Their valuations may not always reflect the actual value, and you should care about that.

I think Kohler's 2020 assessment was correct, but his share valuation fell far under the actual value of Boral shares. ** Boral to $11+, How would that be possible?

I can't see the Boral board's assessing the value of the shares above their low $9+ valuation. Valuing the shares greater than $10 would only be creating some real work for themselves, maybe they are going with the undertarget and overachieve strategy, but that diddlles you out of the real value in your shares.

Why would Boral accept the recent independent share valuation? well apart from not giving themselves too much work, they are not hawking themselves looking for an investment or a buyer. Think logically about it, Mr Stokes is no fool and he's a track record of buying LOW....So $6.40 was LOW, $7.40 is LOW, $8.40 will be LOW, and $9 is starting to reflect a closer market value. But I said Boral to $11+, and I stick with that because Boral’s an iceberg. What I mean by this is that Boral's visible value is what the share value is based on, but the real value is what's not easily seen. Boral holds enormous value in their position on raw materials supply into the construction industry and they have a comprehensive portfolio of property to be sold or developed. Either way that value is hidden underwater and share values do not reflect this information.

Last years Covid bump notwithstanding, Boral have had some crap going on and Todorcevski is already dumping non-performing debris. Both Boral and Stokes (I believe) have undervalued the stock, and though I really like Todorcevski, Boral's $8.25 to $9+ could be more aggressive. Stokes now makes a second low ball (not bullish but Bullsh*t) offer of $7.40 with perks, ha, what a joke, pretty much the low-ball offer of the year. If he gets away with it he'll have bought the company for song, then separate the property portfolio etc., etc., etc., shareholders moan the loss. If Mr Stokes offered $9 a share it would start to be a fair offer, and one that shareholders should consider, but $7.40 is a joke, even $8.40 is a low-ball, bargain basement steal. That he's offering $7.40 now where he previously offered $6.40 shows he'll low ball his way to a win. Like that guy who just hopes if he asks enough, the girl will give in and go on a date.

All the above said....Having withheld the interim dividend payment Boral need to offer shareholders something real. The Boral board need's to show their hand around the dividend and explain Boral's intention. Boral have had a 3.6 billion windfall, which doesn’t mean they should (or can) throw cash at shareholders, but they can offer share dividends at $0.15 - $0.20 fully franked. It's affordable and it will hopefully push shares to a better, real valuation of $8.50 to $9.20. I believe it would fend off the low-ball express train that Stokes’ low ball team have been low balling at shareholders, but I think most importantly for the Boral board, it would secure the full support of shareholders going forward.