The Intelligent Investing Podcast Eric Schleien on Vistry Group: Mispriced Crown Jewel or Value Trap?
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Apr 7, 2025 Discover the intriguing case for Vistry Group's potential as a mispriced gem or a dangerous value trap. Delve into the dual business model that combines traditional homebuilding with an asset-light partnership approach. Learn how profit warnings stem from legacy issues, not the core business's strength. Explore government initiatives supporting affordable housing and the hidden potential for returns of 3–4x. Eric sheds light on market misconceptions and the real risks, making it a must-listen for value investors.
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Vistry's Dual Business Model
- Vistry Group operates a dual business model: traditional home building and partnerships.
- The partnerships segment offers higher returns and is misunderstood by the market.
Profit Warnings and Their Cause
- Vistry's stock declined after three profit warnings, causing concern among investors.
- The warnings stemmed from cost overruns in the legacy home building division.
Partners Trying to Exploit Vistry
- Partners tried to exploit Vistry's situation by offering discounted land purchases.
- CEO Greg Fitzgerald refused, prioritizing long-term value over short-term optics.
