Our first Alpha small cap research report looks at small-cap property investment company Local Shopping REIT (LSR). We conclude that its shares are priced at too deep a discount to the company's net asset value given the likely cash proceeds from an ongoing divestment programme.
The company’s balance sheet is set to be debt free by end-June 2018, and in a substantial cash position by end September 2018. After taking into account operating costs incurred during the divestment process, and likely discounts offered to buyers of its 151 remaining properties, this suggests the 24 per cent share price discount to spot net asset value of 41p a share has scope to narrow.
