ARA Analysis - Part VII

Conclusion

1. Valuations of ARA show that it is not cheap but neither is it expensive. According to Credit-Suisse, ARA is trading at a discount to its peers, when measured on a P/E basis.
2. ARA offer decent growth that comes with a strong ability to raise funds.
3. ARA is for the investor who has a positive outlook on real estate and want exposure to it
4. It provides exposure to an upturn in real estate prices come 2010/2011 as the real estate market turns and it exit from it private fund - ADF.
5. Offer a good yield that is expected to grow over time relative to your initial purchase price
6. Superior to REITs.
7. Good for investors who want a good yield while still getting some upside from improvements in capital values
8. Offer an attractive risk/reward proposition
9. Not for the investor who want to see strong capital gains in the share price - for that, developer stocks should be preferred
10. Best to combine ARA with developer stocks - might improve risk/reward proposition of the stock portfolio as opposed to a REIT+developer portfolio

In conclusion, ARA is a stock worth buying for a good yield with some capital upside and a 2 to 3-year hold to 2011/12 is recommended as 2011/12 should see ARA's results get boosted from an exit from its private fund.