Aventus Retail Property Fund

Completed  internalisation of its management functions & charted healthy FY 19 Outlook: Aventus Retail Property Fund (ASX: AVN) that operates Australia’s large format retail centres has now developed a fully integrated platform. The group has grown its assets under management at a significant rate since 2015. Higher occupancy and contracted rent increases are expected to drive the group’s performance. For FY 19, AVN expects FFO (Funds from Operations) per unit to be 18.4 cents per unit. The company for FY 19 has projects in pipeline worth more than $40m.
 
On the other hand, the company has successfully completed the  internalisation of its management functions in October 2018. This has resulted in the creation of stronger alignment and improved Aventus' competitive position for acquisitions along with the potential to add third party funds management and asset management income streams. AVN is now a fully integrated platform that has both real estate in addition to asset management, development management, investment management and leasing capacity. Meanwhile, AVN stock has fallen 4.13% in three months as on December 04, 2018 and is trading at a P/E of 7.45x. The group has a high dividend yield of about 7.95% at around $1.09 bn of market capitalisation. The stock is trading at the price of level $2.06, and has support at $1.95 and resistance at $2.13. Thus, the valuation potential looks decent given low trading levels. Based on the foregoing, we give a “Speculative Buy” recommendation on the stock at the current price of $ 2.06.
 

Kathmandu Holdings Ltd

Expects profits to be strongly above last year in the first half of FY19:Kathmandu Holdings Ltd (ASX: KMD) for the 15 full weeks to 11 November 2018 has delivered 8.4% growth in total sales growth at constant exchange rates (excluding Oboz), 6.3% rise in Kathmandu same store sales growth at constant exchange rates, 7.1% growth in Australia and 5.2% growth in New Zealand for same store sales. Further, for Oboz, during the first quarter of FY 19, sales were of the order of NZD $15.7m at a gross margin of 39.8% and the group is on track to achieve the US$7.1m EBITDA earn-out target for the 2018 calendar year. The company expects profits to be strongly above last year in the first half of FY19 on the back of the Summer Sale.
 
Meanwhile, KMD stock has fallen 11% in three months as on December 04, 2018  and is trading at a P/E of 11.79x. The stock is trading at the price of level $2.55, and has support at $2.25 and resistance at $3.03. Further, the stock has a fully franked dividend yield of about 5.19% (maintained with a decent growth since 2015) at a market capitalisation of $ 584.77m. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 2.55 as the future performance is also dependent on the summer sale while winter sale momentum is generally strong.
 
 

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