Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>HHH continues to exhibit the benefits of having operating assets as part of its MPCs. These operating assets provide essential cash flow to the rest of HHH</li>
<li>Operating assets becoming the core part of the business and HHH no longer requiring debt to fund its expansion needs</li>
<li>The Company has six unstabilized properties that could add $13.7 million of NOI by 2025 and has another six properties under construction to be completed by 2026.</li>
</ul>


HHH continues to exhibit the benefits of having operating assets as part of its MPCs. These operating assets provide essential cash flow to the rest of HHH
Operating assets becoming the core part of the business and HHH no longer requiring debt to fund its expansion needs
The Company has six unstabilized properties that could add $13.7 million of NOI by 2025 and has another six properties under construction to be completed by 2026.


<ul type="disc"><li>
Howard Hughes Corp. (HHC) accelerated expansion of its master planned communities (“MPC”), which should generate greater level of funds from operation (“FFO”) over the next few quarters.</li></ul> <ul type="disc"><li>The popularity of the MPCs has gone unabated with families moving away from urban centers. The accelerated growth in the MPCs causes HHC to invest in commercial real estate to support the larger population. The cash flow from these properties should begin to benefit the top and bottom lines over the next twelve months.</li></ul> <ul type="disc"><li>A SEC filing on September 8, 2021, disclosed additional share purchase of HHC by the Company’s Chairman, Bill Ackman, and his firm Pershing Square Capital Management; raising its stake to approximately 25 percent.</li></ul> <ul type="disc"><li>The Street is pricing in more risk than we believe is inherently warranted given the performance of the properties HHC has built. Additionally, we do not believe the current valuation gives HHC any of the revenue and earnings credit the Company is expected to realize when it begins recognizing unit sales at Ward Village later this year.</li></ul>


Howard Hughes Corp. (HHC) accelerated expansion of its master planned communities (“MPC”), which should generate greater level of funds from operation (“FFO”) over the next few quarters. The popularity of the MPCs has gone unabated with families moving away from urban centers. The accelerated growth in the MPCs causes HHC to invest in commercial real estate to support the larger population. The cash flow from these properties should begin to benefit the top and bottom lines over the next twelve months. A SEC filing on September 8, 2021, disclosed additional share purchase of HHC by the Company’s Chairman, Bill Ackman, and his firm Pershing Square Capital Management; raising its stake to approximately 25 percent. The Street is pricing in more risk than we believe is inherently warranted given the performance of the properties HHC has built. Additionally, we do not believe the current valuation gives HHC any of the revenue and earnings credit the Company is expected to realize when it begins recognizing unit sales at Ward Village later this year.

<ul>
<li>HHH held its annual investor day updating investors on the continued increase in population at its MPC, but that was not enough to offset the decline in NAV</li>
<li>HHH’s management reiterated the trends that have fueled the business have continued with price per square foot and acre having increased over the past year.</li>
<li>HHH is now estimating its NAV at $129 compared to $170 last year. We are lowering our price target to $110 from $150 to reflect the erosion in the NAV</li>
</ul>


HHH held its annual investor day updating investors on the continued increase in population at its MPC, but that was not enough to offset the decline in NAV
HHH’s management reiterated the trends that have fueled the business have continued with price per square foot and acre having increased over the past year.
HHH is now estimating its NAV at $129 compared to $170 last year. We are lowering our price target to $110 from $150 to reflect the erosion in the NAV


<ul>
<li>HHC highlighted its self-funding business style that should contribute to growing the scale of the Company’s commercial operations within its master planned communities (“MPC”)</li>
<li>HHC reported revenue of $482 million in Q4, bringing full year 2022 revenue to $1.61 billion. The full year revenue increase was expected as HHC recognizes condo sales upon delivery</li>
<li>Since the seventh tower, Victoria Place, will be completed in 2024, which means, condo sales in 2023 would be limited </li>
</ul>


HHC highlighted its self-funding business style that should contribute to growing the scale of the Company’s commercial operations within its master planned communities (“MPC”)
HHC reported revenue of $482 million in Q4, bringing full year 2022 revenue to $1.61 billion. The full year revenue increase was expected as HHC recognizes condo sales upon delivery
Since the seventh tower, Victoria Place, will be completed in 2024, which means, condo sales in 2023 would be limited 


<ul>
<li>The tender offer of a month ago has helped reduce the selling pressure on the shares of HHC and is bringing attention to the underlying asset value of the business</li>
<li>HHC’s MPCs have attracted more people causing the MPCs to reach optimal levels to sustain cash flow generation. </li>
<li>HHC’s ability to grow cash flow to reinvest into its MPCs should lead to greater earnings growth over the long-term. </li>
</ul>


The tender offer of a month ago has helped reduce the selling pressure on the shares of HHC and is bringing attention to the underlying asset value of the business
HHC’s MPCs have attracted more people causing the MPCs to reach optimal levels to sustain cash flow generation. 
HHC’s ability to grow cash flow to reinvest into its MPCs should lead to greater earnings growth over the long-term. 


United States

The Howard Hughes Corporation develops real estate. The Company manages master planned communities, shopping malls, and mixed-use developments throughout the United States.

Howard Hughes / (HHC US)

HHH: Waiting for Earnings Horsepower

The number of operating assets continues to grow and should contribute to funds from operation (FFO) growing over the next few years

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HHC: Multi Layers of a Growth Story

The current quarter continues to evolve with the popularity of HHC's MPCs. The Street continues to discount the cash flow HHC can generate from the...

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HHH: NAV Reduction, PT to $110

The rising cost of capital has resulted in a change in cap rate assumptions to calculate their NAV. The NAV is now $129 from $170. We are reducing...

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HHC: The Cash Flow Story Continues

The 2022 10K filing shows HHC generated positive cash flow from operations in 2022 supporting our investment thesis in how HHC generate cash flow...

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HHC: Starting the Year Reinvesting

The overhang of HHC having to make debt payments has been mostly removed and should resolve the biggest concern we had been hearing from investors....

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