Richard Mashaal is known as a shrewd value investor though he got burned in 2015 and 2016 by his unfortunate bets on NorthStar Asset Management, NorthStar Realty Finance, and NorthStar Realty Europe Corp (NRE). Last night Richard Mashaal’s Senvest Management shared his thoughts about Northstar Realty Europe Corp. (NRE) in a 13D filing.
Established back in April 1997, Rima Senvest Management boasts an annualized return of around 18-19% per year. The fund’s managers, Richard Mashaal and Brian Gonick, tend to buy stocks that are beaten up, out of favor, and that would double or triple in value over a period of one to three years. Senvest Partners fund returned more than 17% in 2017, 23% in 2016, -17.3% in 2015, 22.4% in 2014, 79.4% in 2013. Senvest Partners also had very volatile returns in 2008 (losing 54.2%), 2009 (gaining 229.3%), and 2011 (losing 34%). As you can guess Richard Mashaal is really serious about buying out of favor stocks some of which experience very sharp losses after he buys them and others delivering wild gains. Senvest Management currently has around $1.5 billion in AUM. Below you can watch an appearance of Richard Mashaal and Brian Gonick on Bloomberg TV in 2017.
We like Richard Mashaal because he has the confidence to make bold contrarian bets even though he was sometimes very wrong. In an early 2015 interview with Barron’s Richard Mashaal and Gonick said the following about McDonald’s (we recommended a long position in MCD at the time):
The fund is short 40 stocks that suffer from an “unsustainability of some kind,” Gonick explains. One is McDonald’s, which Mashaal believes would fall far below its price of $90.89 if not for a generous dividend yield of 3.7%. “People are done with manufactured food, and they have been getting done with it for the last 10 years,” Mashaal says. “But I just really believe that we are at the tipping point.”
McDonald’s shares currently trade at $166. Keeping these in mind, we are going to share Richard Mashaal’s letter to Northstar Realty Europe Corp. (NRE):