That fact that i have money to go into a new position and i didn't have a buy order in the FIN cue today speaks volumes about my uncertainty's with this company...i had a good look at them over the weekend and like alot of stocks favoured by value investors, i came away thinking they have a high ROE because they don't actually own anything.
I see this as a positive, no expensive plant or equiptment, just the ability to allocate capital for a high return
They have a staff of 8 and get fees from doing RE deals mostly with JV partners, all the debt is at project level but there's no real recurring cash flow...they have to keep churning over the deals and developments.
Too right they have been doing this for 26 years and have a heap of deals on the horizon for the future.
Perth is a small city and there's only so many apartments that can realistically be built...15 minutes drive from Perth airport and your driving pass cows in paddocks...there's alot of undeveloped land in Perth but no one wants to live more than 40 minutes from the beach.
And there's only so many Sand-groper's willing to pay $800.000 for a unit.
IMO WA is where the major growth for Australia is, the reserve bank is jacking up interest rates to cool the rest of the economy so we have some spare capacity to deploy for the projected resources boom. A lot of people will move to Perth for employment opportunities but that is only part of the story for Finbar. The Pilbarra is where the real money is to be made. Just look up positions vacant in the mining industry and realestate prices in Karratha or Dampier.