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Is Westfield a stock to buy for the New Year?

Shares in global property giant Westfield Group (ASX: WDC) have gained 2.1% today which would come as relief to shareholders who have watched their holding fall in value over the last month.

Earlier in December, the company’s shares soared after it announced its intentions to split its domestic and international assets, whereby its Australian and New Zealand assets would be combined with those of Westfield Retail Trust’s (ASX: WRT) to form a new company, Scentre Group, whilst its international assets would also form a new company to be known as Westfield Corporation.

Investors and analysts saw logic in the deal recognising that under the new arrangement, both companies would be able to “pursue their individual strategic goals and financing plans”. Furthermore, it was seen that the proposal would create greater value for shareholders in both Westfield Group and Westfield Retail Trust while it would also “generate greater growth.”

However, concerns began to arise regarding details on the valuation and transparency of the deal as well as the long-term impacts on investors. Having hit a high of $11.04 following the deal, the Group’s shares plunged to as low as $9.67. Similarly, Westfield Retail Trust’s shares fell from around $3.14 to as low as $2.82, based on the same concerns.

While Westfield Retail Trust’s shares are down 1.7% today, the Group’s shares have gained 2.1% with investors perhaps recognising long-term value ahead. Under the deal, Westfield Corporation would have total assets worth US$17.6 billion and Scentre Group’s total assets would be equal to AU$28.5 billion.

Foolish takeaway

Shares in Westfield Group have been hit hard this year based on volatile consumer and business confidence as well as the rapid rise of the online retail sector, with many investors fearing for the future of the bricks and mortar retail industry.

However, Westfield has plenty to offer. The company has been heavily focused on strengthening its position globally by redeveloping its strongest stores and divesting from those with less potential. The aim is to ensure it performs strongly for years to come. With shares currently trading 17.8% below their two-year high of $12.55, Westfield Group could certainly boost your portfolio’s value next year.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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