Tuesday, November 12, 2019

Aedifica intrinsic value guesstimate

When Warren Buffett was asked "Which stocks should I consider first?" he said "Start with the A's"
A company that was recently listed in Amsterdam (and earlier in Belgium, currently dual-listed) is Aedifica. Aedifica is Latin for "build". It is a Belgian REIT that invests in healthcare real estate for the elderly.
It has 260 properties and is expanding through takeovers partly by selling shares. In 2016 14m shares were listed in 2019 26m shares were listed at the same time it was paying an increasing dividend per share.

Sales were €118m in 2018 and Current Assets were €34m and Current Debt €308m. Long-term debt was €650m. It is not what Benjamin Graham would consider a "defensive" investment.

The Graham Number is Square Root of (15 x 4,3 EPS x 1,5 x €53 book value) = €75

The dividend is expected to be €3/€110 = 3%

Conclusion November 2019: Outside my circle of competence. I am not familiar with the company and don't understand EPRA (European Public Real Estate) Earnings. It seems like Mr. Market is getting a bit over-enthusiastic... We'll see.

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