Amerco (UHAL) - Déjà Vu All Over Again

I was looking over a NY Times article from August 20, 2003 about U-Haul's bankruptcy.

The following quote reminds me of the current situation General Growth Properties (GGWPQ) is experiencing:

Stocks of companies that have filed for bankruptcy protection usually trade for pennies. But shares of Amerco, the company that controls U-Haul... have nearly tripled since it sought Chapter 11 protection.

General Growth's stock price has climbed over 950% from a low of around $0.49 a share. Bill Ackman, Pershing Square Capital Management and 25.6% owner, spoke about GGP's tremendous upside potential.

...estimated the value of bankrupt REIT General Growth stock at $20 to $35 per share post bankruptcy.

If that estimate holds true we are looking at a total of 4000-7000% return. You don't need too many of these in a lifetime.

Another important similarity to notice is the fact that both Amerco and General Growth have individuals on their boards advocating on behalf of shareholders. Bill Ackman's presence on the board increases the likelihood that common shareholders will come out of this bankruptcy mostly intact. This reuters article mentions this point.

Ackman said he will be a tenacious advocate for shareholders, another key for equity investors getting back their investment.

These are the kinds of opportunities you only read about.. buying dollars for pennies.

Reference:

• Bill Ackman's GGP Presentation