ARA

What it does

1. Management of RIETs
2. Management of real-estate related private funds
3. Management of real-estate
4. Provides financial advice to RIETs managed by ARA

Business

ARA is a large service provider to the real-estate industry. Its business model makes it resistant to the market forces and allows it to continue sustained growth through acquiring more deals to manage real-estate relate financial instruments.

Financials

Why buy?

1. Total revenue on long term unwavering uptrend.

 

(Total revenue of ARA for 5 years starting from 2007 on the right)

2. Relatively consistent divident payout, yield of about 3%

   

(Dividents of ARA for 5 years starting from 2007 on the right)

3. Low long term debt.

 

 (Long term debt of ARA for 5 years starting from 2007 on the right)

4.  High cash.

 (Cash & cash equivalents of ARA for 5 years starting from 2007 on the right)

 

Why not? 

1. PE value almost 20.

Final Verdict

ARA definitely has a wonderful business model. Its income is steady, with a strong balanced sheet. However, with such a high PE, one must be very confident of high sustained growth for this company to be able to reap substantial returns on their investment.