Friday, October 17, 2008

Strategic Hotels

I was drawn to Strategic Hotels (NYSE:BEE) on hearing about Bill Gates taking up a stake in it via his investment company Cascade Investments. Value investors like Bill Gates are usually early to the party. The price has nearly halved since he bought shares and is around 4$ today( 17 Oct 08).

Recently I saw a report that Bill is now going to take an active strategic role in the business.

My guess is that at this price he can simply take over the company, Bill is no stranger to the hotel business, and has a stake in the Four Seasons Hotels.

I will skip detailing a valuation of the company here, I think it is cheap. Bill is no fool and I assume that he has done more due diligence than I will ever be able to match.

I am going long Strategic Hotels.


returntomean said...

This did not go as planned.
The dividend cut was expected the price drop and lack of interest from Bill G was not.

Sometimes I am very wrong.

Anonymous said...

Are you still in the stock? Or did you sell out and if you did at what price?

What do you think of BEE going forward?

returntomean said...

Am still holding and may sell after i look at the upcoming results.

As for the future I am not sure. MY guess is that there will be no improvement in luxury hotels until there is an improvement in the economy. This may be dead in the water for years unless someone comes with a takeover offer. But there may be other properties that may be available cheap va bankruptcies so the hope of getting a good price is gone.