I promised an occasional set of suggestions on undiscovered and undervalued ofex stocks. I said there were still a few astonishing bargains over there and in my view this one fits the bill admirably. (my first suggestion Millbrook is up after two new partnerships and a nice contract win.)

Before i go any further, if you do not like property stocks, look away now! Let's not have a debate on the delights or otherwise of a property crash. i think you as investors have your views and are pretty clued up on the arguments for and against, but suffice to say, if you think commercial property will tumble then this share is not for you.

The stock, then is GSC Property. I hold. GSC has a portfolio worth 43 million plus cash of just under 5 million, after a recent sale. Repayments are fixed over 25 years at around 6%, totalling about 37 million. So nav is over 10 million and the nav is 101p a share. The shares are trading at 55-60p (market cap 5.75 million, nearly covered by cash!) a 40%+ discount to nav and as i said in the headline are profitable.

So why else is this so attractive? It buys on the theme of covenant, rather than location. Among the properties they own are a banking hall in Essex and a drive through in Birmingham. 90% of their customers are top 350 UK companies and or government. They are due for a revaluation of their portfolio soon, (likely to be up if the market is any indicator) and rent reviews should add to profits. The nearest company I can find is Aim listed PHP which is trading at a 5-10% Premium to nav. That would put GSC on 110p a share. Even if you think a discount is more apt however a 10-15% discount would see the shares at 85-90p which i consider to be fair value for the short term.

Oh they even pay a dividend of over 1p a share.

Strong Buy.

8Ball you mentioned SAF might get taken private, is that your feeling or has the company said something to make you wonder. It's the last thing holding me back, do you think we'd be able to get out first? I remember a similar ofex company doing something similar (Sion) and there is still bitterness about it.

They don't pay a dividend.

Instead they have used spare cash to buy back shares, that plus the discount to asset value makes me feel it is possible.

The family have a large percentage of the shares at the moment, so it would not take a lot to go private.

If it was me I would.

Truly the discount (down 2p again today) is astonishing. Thanks for your honest post. I am sure there must be others at such a discount, but i don't know what they are! Will sleep on it.......

Do you have a date for the results?

It was great to note that the 10% rise was from 10,000 shares bought.
Something exciting about small trading moving the price.

You should check out the ADVFN BB for more info on SAF.
Simonevans from my experiance is a good poster.

It would appear the 10,000 was the directors selling, in order to make shares available.

Thanks for e mail Hawick.

I am unable to reply as your address does not appear via Money AM.

Hi 8ball finally bought in. I see SAF sold some Hercules shares so nav now 95p+ against share price of under 54p.

Now in the very happy position of holding GSC and SAF!

SAF was tipped in Telegraph yesterday but I missed the article.

No I didn't see that but good news!

Small rise today on the back of a 2,500 Buy.
Results should be out soon?

Nice to have one stock that is at an all time high after the last few days elsewhere!! (Actually Mechan is as well and BLS is close!). Keeping an eye for results but might be a few weeks yet? Hope we get an upgrade on the portfolio at some stage.

A 700 buy lifts the Share price another 5%.
Don't you just love it when that happens?

Directors will have to sell a few more to meet demand soon.

Results late May.

Shame the AGM is so far from us both.

Hi 8Ball, I think there must be someone trying to buy a few behind the scenes, up another 2p on another 1000 shares this morning. Of course, Ofex ain't going to persuade anyone to sell at the current levels, and i reckon they know it!

Might they have an idea about the results?
Following todays trade I guess they must be out of stock?

Just guessing here 8ball, but 1.5 million should come off the amounts due, (annually, but remember these figures are just for a six month period) so even with break even and no portfolio upgrade that should mean an increase in nav.

Share price 72.5p :) :) :)

And so it will improve, year after year! Those of us already in, (or who join in soon,) are laughing!

Tempted to add another 1500 just to see what it does to the price.
Will ponder til Friday......

8Ball you have a p-m.

Would be nice to hope the people buying have good reason to be confident (can't see why they wouldn't have!). I gather from another poster elsewhere Winterfloods should be making a market in all ofex stocks in July.

Be very careful with these, Ofex thin volumes has clearly been over rating property companies on Aim, Oakdene was 130.5p yesterday on Ofex the more proffessional investors on AIM are valuing it at 108p below the placing price..you have been warned.


May well drop when new market makers come on board in June (expected) & shorting is an option.

anyone checked the options which may hve been given to executives/directors .as conversion of the options in a small company can severely erode the value of share and dividend values.
in small companies it is so important to examine and keep checking the option position!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

MPW, very good point there, thanks for pointing out another attraction of GSC. As a shareholder I am pleased to tell you there are none, zero, zilch options/warrants etc!! :) .

Totally agree with you though mpw777 they can be very debilitating for Ofex stocks in particular, and imho these are the Ofex stocks that will be most vulnerable to shorters when competitive mms arrive (beware - infact I'd say avoid - most shares that were originally Ruegg offerings in particular, they could get thumped by shorters, far too heavy a dilution in most cases imho, making them real vulnerable!).

Results due from GSC next week, so hoping we will see an ever increasing GSC nav. Indeed, if they were to award themselves a few options, could not blame them!
As for the competitive mm comment, not worried atall. Much more likely to benefit a stock like this at such a tasty discount to nav. :)

Anyone shorting a stock like this would get badly burnt imho. As i am in for the long term such shenanigans would be welcome opportunities to top up. :)

Suggest you keep an eye out for GSC results MPW, could persuade you to get in.

Incidentally, which as i think Third Eye knows, i tipped Oakdene elsewhere last summer at 48.5p (he was negative on that one then too, as he was on GSC at 45p more recently). Oakdene is up 130% since, so a bit of a correction today not really a problem! And I reckon GSC could overtake it in the next twelve months :) .