Stockbroker Moelis has initiated coverage on Aspen Group with the expectation of strong growth in the years ahead.
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By Rudi Filapek-Vandyck<\/p>\n
Stockbroker Moelis has initiated coverage on property investment and management company Aspen Group ((APZ))<\/strong> with a Buy rating and twelve month price target of $1.31, suggesting a total return potential of circa 26% from the present share price.<\/p>\n On Moelis' projections, Aspen is poised to grow profits strongly in the years ahead with the broker's modeling assuming EPS CAGR of circa 30% for the period FY17-19. On the back of this growth, dividend payments are expected to rise from 4.5c per share this year to 7c in FY19.<\/p>\n Aspen Group has been restructuring with Moelis observing the business has emerged with a much simplified format focused on affordable accommodation and with a balance sheet that offers the capacity to make accretive acquisitions, enhance park returns via operational initiatives, and undertake value-add activities including site intensification and brownfield developments.<\/p>\n Characteristics that receive the thumbs up from Moelis include exposure to the ageing population and rising inbound and domestic tourism themes, a capital-light development pipeline plus the opportunity to become a consolidator in a largely fragmented industry.<\/p>\n The company is at present debt-free and, assuming gearing of up to 30%, Moelis estimates there is a capacity to spend $65m on new acquisitions. The company is still leveraged to the resources cycle through the Aspen Karratha Village in the Pilbara, but tourism\/holiday and mixed-use parks represent the largest part of the business, with retirement villages in Western Australia and NSW coming in third.<\/p>\n As I write this story, the company's official website is unaccessible.
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