AEC’s most recent performance was solid, and the earnings call clinched it for me.
This company is too cheap and literally everyone knows it. Above and beyond the consistent and regular return they’re pulling in, there’s chatter of “realizing the portfolio’s true value”.
With a company this size, in this environment, I can only reach the conclusion that means a corporate buyout is looming.
Their CEO and main shareholder is old. Friedman can’t be around forever. And his company’s management have proven themselves over the past five years to be highly competent. The move to separate their debt covenants from their properties in 2009 alone was probably the smartest move of any real estate company around.
So AEC is going to start getting some real attention from larger companies, who are sitting on piles of cash and looking to keep that shareholder growth coming. CLP getting gobbled up by MAA was the first, but it won’t be the last.
Cash stands between 30-40%.
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Let it be known that one “Mike” was conspicuously absent from the call…
AEC’s current price seems to neglect the properties they’re still in the process of building. It’s kind of crazy how cheap it is, just need to sit around and collect a 5% dividend until the market realizes just how much of an impact on earnings some of those properties are going to have once they’re occupied.