Aveo is now trading at a remarkable 40% discount to NTA. I do not think there is another billion dollar company that comes close to such a discount. It is like paying 60 cents for a dollar. Plus you get a retirement village operator business with the assets. This is a staggering margin of safety.
Competitors like Ryman and Summerset trade at 300% - 400% of NTA.
WAM confirmed that Aveo customer enquiry levels have returned to levels above those at the time the 4 corners story went to air. Aveo has effectively resolved all of the concerns which arose from its legacy contracts.
Aveo has a great opportunity to increase its care services levels to the same as Ryman and Summerset. This would be the next phase of growth in revenues.
Their development margins are also consistently greater than forecast, with Gasworks and the recent uptick in EPS.
The emotions of the 4 corners story linger to the share price, but the business itself and customers have moved on. This is a great buying opportunity.
DYOR
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