Opinions
Bruce Campbell (2)
Altus Group
AIF-T
TOP PICK
Aug 26, 2016
Stock price when the opinion was issued
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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.
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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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Commercial real estate valuations. Consulting is their steady Eddie business, but they also have Altus Analytics, a software business which is a really high recurring business with strong margins, and which has been growing at about 30% per year. As well, they have a survey business which has been hurt by the energy sector and we are starting to see a turn in energy. Dividend yield of 2.19%.