Bell Potter doesn't cover FRI, but their recent "residential developer's review" included the company along with 10 others. FRI compares favourably on most counts.
Of course, I can't reproduce the report, but copyright law allows me to summarise the key points in my own words:
1. Strong demand for apartments (whereas 1st home buying is weak), so FRI is well positioned. But NSW is currently the strongest market (FRI is only in WA).
2. FY13 financial performance -- FRI stood above the others on all metrics (sales, EBITDA, EPS growth, ROA, ROE), but remember that FRI sales were weaker in FY12 due to timing of product on market.
3. FRI also shines on most current valuations against seven others (AVJ, CWP, DVN, FKP, PPC, SDG, VLW): EV/EBITDA -lowest est. for 2104 and 2015, 2nd lowest above VLW in 2013. P/E -- lowest est. for 2014 and 2015, 2nd lowest to FKP in 2013 EPS Growth -- highest in 2013, 3rd highest est. for 2014, but 2nd lowest est. for 2015 mid-cycle EPS (10-year NPAT average/shares) -- 2nd lowest EPS, lowest EPS growth, highest (with CWP) P/E -- i.e., FRI and CWP are currently at peak earnings whereas others are rising from the cycle bottom
Bell explains that FRI is "cheap, but with reason" -- it is leveraged to WA.
FRI Price at posting:
$1.50 Sentiment: None Disclosure: Held
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