finbar buy opportunity

Hello everyone,

I was reading the march edition of Smart Investor and saw a review on Finbar Group. I'd just like to put forth my argument as to why i think FRI is a great purchase at this current point in time, and why i'm bullish on the company's prospects.

Firstly, the stock has a strong directors interest - always great to see some skin in the game! Secondly, low interest rates make for a great residential development play. Thirdly, its Half-Year 2013-14 Profit of $19m is in line with the company's guidance of a FY14 profit of $31m, roughly the same as last years profit. There is IMO however, substantial value in the company which hasn't yet been recognised, and the company is trading at an attractive price considering. The company has a substantial pipeline of projects to be started with relation to 2013, and profits will begin to materialise in 2014-15 on-wards.

Fundamentals:

- Small-cap company with plenty of room for expansion
- Relatively well priced: P/E of 11.53 and P/B of 1.8
- Fully franked Dividend with yield of 7.6%
- ROE of 15.4%
- Relatively good debt levels

The only downside i would say with relation to the fundamentals is the company's negative cash flow from operating activities. It is not substantial, and has improved since last years results, however we will have to wait for FY14 results to see if the company's cash flow has improved.

All in all, my sentiment on the company is quite bullish over the medium to long-term. Greater profits should start to materialise in 2014-15, but i think its still a great stock to hold considering the upside, and i believe the market will begin to factor in this information in the coming months.