Helma Eigenheimbau provides an opportunity to gain entry into a growth company in a positive phase for the sector, at a time when home ownership is getting government encouragement. Federal government is responding to a recent decline in home ownership to 51.9%, versus 53.4% five years ago, by providing incentives, which along with low interest rates and population growth provides a favourable backdrop. The shares declined a little further after the results for 2016 were released in early March and have fluctuated between €38 and €40 since then. They are still below the 12-month peak levels but up 4x from the 2012 low point. The company issued guidance recently (23 February 2017) that lowered the expected rate of growth in 2017-18 to around 10% pa for revenue and earnings; the share price reaction was overly harsh, in our view.

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