Why is Hemisphere Properties buzzing on bourses?
The stock is up by nearly 60 per cent on YTD basis.
Hemisphere Properties is one companies with zero sales and loads of expenditure incurred on the books and yet the company’s stock price is up by more than 4 per cent on intraday basis on Friday.
If one digs deeper, investors are speculating that the company’s land holding is valued much more than the total market capitalization of the company. The most conservatives estimate pegs the land value to at least four times the total market cap of the company.
Long term investors with holding capacity are betting on the future development prospects of this massive parcel of land across major cities for example it holds 524 acres of land in Pune. The stock is up by nearly 60 per cent on YTD basis.
When investors buy such stocks with no business activity and with a hope that the land parcels will be monetized sooner or later, the investment horizon should be ultra-long term.