Morguard (MRC – Toronto Stock Exchange) is a Canadian real estate company. Its shares trade at $70, giving it a market cap of approximately $900 million. (All financial figures in this writeup are in Canadian dollars.) Morguard was the subject of my presentation at the Value Investing Congress in Pasadena and is one of our largest positions. Not only is it cheap, but it’s a high quality and extremely well-run business as well, and that is a rare combination.

Over 50% of the company is owned by CEO Rai Sahi, who is a tremendous capital allocator. A little history: Morguard was a struggling distributor of industrial products and auto parts until 1990, when Sahi took control of the company. He turned around the distribution business and sold it, leaving Morguard with a sizeable war chest. As this was happening, real estate stocks started to experience a major slump – Warren Buffett actually invested his entire non-Berkshire net worth in REITs during this period. Sahi similarly saw an opportunity and pounced, acquiring or taking control of five real estate firms at extraordinary valuations.