The chair and co-founder of Harvey Norman Holdings Limited (ASX: HVN) has splurged just under $50 million of his own money buying more shares on-market over the past fortnight.
How's that for a vote of confidence?
Gerry Harvey has continued his epic buy-the-dip strategy, which we first reported on earlier this month.
According to several notices lodged with the ASX, Harvey appears to have a shop-til-ya-drop mentality.
He bought mega parcels of shares in his ASX 200 company on every single trading day between 2 March and 15 March, according to the last ASX notice.
He is buying the ASX 200 retail shares through a trust.
So far, Harvey has spent $49.98 million over the past fortnight alone buying tens of millions of shares.
The colossal buy-up has increased his stake in Harvey Norman from 31.51% to 32.66%.
Harvey holds almost 407 million Harvey Norman shares in total.
Talk about having 'skin in the game'!
Why is this ASX 200 director buying in bulk?
As noted earlier, this appears to be one hell of a buying-the-dip exercise.
Buying the dip is where investors purchase ASX shares that have fallen in value in the hope they can profit from short-term volatility in the company's share price.
Essentially, they are betting that the decline will be temporary and they can capitalise on the rebound.
Long-term investors also use this strategy for dollar-cost averaging purposes, whereby they buy the dip on a stock they already own to lower the average price paid for all the shares they hold in that company.
The Harvey Norman share price is down 10.6% since the company reported its 1H FY23 results on 28 February.
The company revealed a 15.1% decline in net profit after tax (NPAT) and slashed the interim dividend by 35%.
As we reported on the day, the Harvey Norman share price was smashed by 12% at its intraday low.
Harvey criticised the market response, calling it a "total overreaction".
Doesn't look like he's cranky about it, though. He's taking full advantage!
Harvey reckons the ASX 200 shares are worth "six to eight bucks", according to a recent article in the Australian Financial Review (AFR).
Should you buy Harvey Norman at today's share price?
The Harvey Norman share price closed at $3.72 on Tuesday, up 0.81% for the day.
According to my Fool colleague James, Goldman Sachs has a buy rating and a 12-month price target of $4.70 on the ASX retail stock.
That implies a juicy potential 25% upside for investors who buy the ASX 200 share today.
Shaw and Partners investment advisor Jed Richards also recommends Harvey Norman at today's share price. But perhaps not for the reason you might think.
Richards says:
In our view, the market is underestimating the value of Harvey Norman's property portfolio, which represents a large portion of the company's entire market capitalisation.
What is Harvey Norman's property portfolio worth?
According to Harvey Norman's 1H FY23 results presentation, its international retail property portfolio is worth more than $3.9 billion.
It has delivered an astounding three-year compound annual growth rate (CAGR) of 74%.
But that's just the capital growth.
In terms of income, Harvey Norman's property segment delivered $186.29 million in profit before tax (PBT) in 1H FY23. This represented 36% of the company's overall PBT.
The segment has delivered a three-year income CAGR of 26%, which is higher than the retail franchising operations segment at 24.3%.
