Altus Group (AIF-T)

Are now a pure-play tech company after selling non-tech businesses. With that cash, are buying back shares. They globally lead in software for data analytics valuing and monitoring commercial real estate assets (banks, insurance companies and property managers are clients). 75% of revenues are recurring and high margin. Trades at a huge discount to US peers. Probably will be acquired in a few years.

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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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

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

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).

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 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.

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 real estate advisory consultant firm, and also trying to build end to end software service solutions for real estate data and real estate analytics. This is what the markets are really starting to get interested in now. A higher margin business and recurring revenues. There is a good short term catalyst here, where they actually own 14% of a private company called Real Matters, which sooner or later is going to IPO with a possible $1 billion valuation. Dividend yield of 2%. (Analysts’ price target is $36.50.)

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%.

(A Top Pick Oct 24/13. Up 68.99%.) Software and valuations for real estate. Just sold his holdings recently. The quarter was alright, but he had high expectations. Felt it got a little bit ahead of itself. Likes the management team.

He has been lightening up. The big decline in energy services impacts this one. He does not see a lot of positive change for this company. He has a small position that he is looking to exit.