Book value = function(discounted cash flows). Initial values are at cost and then assessed up/down by the directors every reporting date using independent valuations.
There are two scenarios to play with 1. Valuation as a going concern 2. Valuation under liquidation/buyout
If you think scenario 1, then you make your valuation based on how impaired you think future cashflows are going to be using current book value as a reference point.
If you think scenario 2, you can't exactly use the book value because someone else is going to have a different income yield and a lot of ppe will be written off.
It's not "clearly undervalued" - there is always the risk that books have been cooked for a while and smart money is out - but unlikely and at these prices worth a punt imo. Income is going to take a hit (how much is up to you to figure out), but unlikely to drop to the point of liquidation given how many people are still going to Westfield.
SCG Price at posting:
$2.31 Sentiment: Hold Disclosure: Held
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