Implied Value

Holloway Lodging: Transformative Acquisition Being Overlooked

(Editor's Note: Investors should be mindful of the risks of transacting in illiquid securities such as HLLOF. Holloway's Canadian listing, HLC.TO, offers stronger liquidity.)

All currencies are in Canadian dollars

Holloway Lodging Corporation (OTC:HLLOF) is an idea that was suggested by a reader. Unlike my other investment in the hospitality space Sotherly Hotels (NASDAQ:SOHO), which runs urban upscale hotels; Holloway is "focused on owning and operating select and limited service hotels in secondary, tertiary and suburban markets".

At the current price of ~$5, shares are arguably undervalued on current earnings (7.5x trailing AFFO) and investors are effectively getting free options on future growth and cost reductions at Royal Host. And I will show that even modest...

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