In my opinion, Kojamo is priced very cheaply and is the best way to gain exposure to the Finnish housing market.
The only thing that frustrates me about the company is the diverging interests of management and owners. A shareholder’s only interest is value growth, but management—especially the CEO—may have different interests.
This is illustrated by the current situation where, at a 0.5x P/EPRA NAV valuation, they are not buying back shares, even though it would be a far superior investment. The CEO prefers to push through acquisitions of new properties with much lower yield requirements. Furthermore, they are paying dividends, which makes absolutely no sense.
So, why does this happen? Because it’s easy for the CEO to be a “good guy” by buying apartments from old colleagues and getting financing from the city’s bankers. And of course, you make good friends with advisors through these “vanity deals.” This is how you secure nice board seats for the later stages of your career.
And naturally, the compensation schemes also drive the wrong results when they are tied to revenue, cash flow per share, and emission reductions. Common sense, where are you? Why isn’t total shareholder return the (only) metric for compensation?
All of the above could be proven wrong if the CEO were to buy a significant amount of shares himself. But he hasn’t bothered yet.