Hidden Assets

It is challenging to find undervalued stocks these days. One solution: Look for small companies with ­“hidden” assets. Due to accounting rules, a balance sheet may not properly reflect the assets a business owns, including investment holdings and real estate. Stocks with hidden assets now…

Howard Hughes Holdings Inc. (HHH). The real estate company acquires acreage in fast-growing areas of the country, then develops planned communities. It owns 40,000 acres waiting to be developed, so there’s a long runway to increase operating income. It also plans to spin off some holdings including New York City’s South Street Seaport complex. Recent share price: $75.35.

IAC (IAC). You may not recognize this digital-media and Internet conglomerate, but you know its publications (People, Food & Wine, Real Simple, etc.). IAC buys businesses and spins them off as stand-alone stocks. Hidden asset: It owns nearly 30% of Turo, a type of  Airbnb for cars. IAC paid $300 million for that, putting Turo’s value at $1 billion. But IAC believes Turo’s value is closer to
$2 billion. Turo may be going public soon. If it does, Wall Street might pay attention to IAC’s stake in this fast-growing business. Recent share price: $51.90.

Kenvue (KVUE) is a trusted consumer health-care company in the US with an unrecognized corporate name. It manufactures brands including Band-Aid, Neutrogena, Listerine and ­Tylenol. Kenvue inherited these products when it was spun off from Johnson & Johnson. The stock has fallen more than 10% below its 2023 IPO price. Investors are overlooking its robust yield (recently 4.2%) and ability to launch products such as Tylenol Precise Pain Relieving Cream. Recent share price: $20.15.