I became a shareholder in APD a few months ago after meeting the company's CEO.
While I have some reservations about the level and the mechanisms of remuneration of the company's CEO, it strikes me that the company's managers have meaningful ownership interest alongside my own and, most importantly, are developing a decent track record of employing not-too-risky strategies and doing not-too-dumb things.
As an investment manager specialising in real estate, at first glance it might not be a very sexy business in terms of organic growth, but it's management has demonstrated a degree of entrepreneurial spirit in originating some interesting growth vectors which are getting some traction.
With a "property-for-income" investment proposition, this is quite appealing, especially when the track record to date (some 5 years-odd, so not extensive but sufficiently long to feel that there is something real under the hood of the car) shows some evidence of this income growth at a rate several times higher than the rate of inflation:
And, sure, I'm cognisant that much of the period represented in that slide coincides with a period of favourable property investing tailwinds, but I still like the combination of measured and entrepreneurial attributes which APD demonstrates.
Finally, its not like one is paying over-the-odds to purchase that stream of growing dividends, with the dividend yield running at 6% (based on today's announcement of an upward revision to distribution guidance), 60% of it being franked.
And the attractive valuation on dividend yield reconciles reasonably well in terms of asset backing, with the value of APD's funds management activities being around $41m (at today's 53c share price), equivalent to just 1.4% of the FUM being managed.
Also, the balance sheet is conservatively struck with no net debt and the Cap Rates being applied in determining carrying values of investments are not overly aggressive:
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APD Price at posting:
53.5¢ Sentiment: Buy Disclosure: Held
