Alex Ruus Altus Group AIF-T SELL Jun 16, 2014

This is involved in real estate, and the real estate holdings in Canada have seen a bit of a pullback recently. Dividends have been pretty steady, giving about a 2% yield. It’s not enough to get him too interested, especially since he sees some slowing in the housing market. He would look at this if he got some actual real negative housing news.

(A Top Pick Apr 11/17, Up 6%) He still likes it. There is the analytics with higher, stickier recurring revenues. They are still getting recurring revenue increases. You get quarter to quarter wild swings.

They have chunky earnings. They are building out software as a service to the real estate market. You have to think 1 to 2 years on this one.

A software provider for commercial real estate portfolios. They also have a consulting service. They are migrating more and more clients around the world onto their platform. There is good organic growth. (Analysts’ target: $38.78).

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong but slowing organic growth. EBITDA nearly doubled in 4 years. Catalyst pipeline solid. Tech-focused Property Tax helping. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Record quarters during COVID. Entry into debt valuation interesting. Greater SaaS revenues support better margins. Premium valuation means less room for error. Unlock Premium - Try 5i Free

AIF saw a sharp drop following its Q3 financial results reported in early November. The stock's struggles have been driven by the slowdown in the real estate market and particularly, concerns regarding commerical real estate. Valuation has now come down to a more reasonable 18.3x forward-earnings. Outlook for 2024 does forecast a bounce back with EPS growth of ~42% and sales growth of ~12%, then moderate growth across both in 2025. The potential bounce back and growth outlook is a decent reason to hold, but it is fair to expect AIF to struggle for a bit following the weak Q3 and negative market trends. We are fine holding AIF to see how sentiment regarding real estate fares in 2024 and how the company bounces back from the weak Q3. 
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