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Gold/Mining/Energy : International Properties Group (IPX-TSE) -- Ignore unavailable to you. Want to Upgrade?

To: Englishbob who wrote (36)	9/6/1998 1:12:00 AM
From: Marcman	Read Replies (1) \| Respond to of 104

HAVE ANY OF YOU SEEN THIS????? I picked it up at the IPX web site. It's a June report from something called "Emerging Growth Stocks". It contains a lot of the information various people have requested about the industry, etc. What I can't figure out is why the stock price is so low!!! ************ EMERGING GROWTH STOCKS (604) 687-5772) International Properties Group - IPX.T Emerging real estate growth company June 5 1998 Shares Issued: 32 Million TSE 52 Week High-Low: $2.30 - $1.25 Price June 5, 1998: $1.30 The Principals of IPG have for the last five years been the largest and most successful condo conversion firm in Canada, converting 1,900 units valued at $165 million over five years. Today IPG continues this, along with residential rentals, in Ontario, Alberta, and Arizona, with a real estate portfolio of $146 million and estimated 1998 revenues of around $91 million. There was private placement of 4.25 million shares at $0.94 prior to going public, which they did via a JCP on the Alberta exchange in April 1997. Then in September they raised $31.5 million by issuing 17 million shares at $1.85, and began trading on the TSE. They have had a high $2.10 and a low of $1.25 since listing in Toronto. On May 29th the stock jumped $0.28 and closed at its high for the day of $1.55 on the release of second quarter earnings $0.05 per share and cash flow of $0.10 per share for the first six months of the fiscal year ending Oct 31/98. The following trading day (Monday, June 1st) the stock got wacked, but I have a feeling it could be the beginning of a new upward trend. Lowest multiples of price to book, price to cash flow Price/Cash Flow per Share 1. Boardwalk BEI 36 2. Centrefund CFE 15 3. Dundee Realty D 12 4. Goldlist Properties GPP 13 5. Cap Reit CAR 15 6. Int. Property Grp IPX 6 Cash Flow per Share and Revenue in $Millions 1997* $0.06 $21 1998(e) $0.24 $91 1999(e) $0.36 $150 includes 6 months data only Canadian real estate stocks generally trade for about 2.8 times book value, and 15 times cash flow per share. IPG is currently trading for only around 1.1 times book value, and 5.5 times cash flow, less than industry average, and only about one quarter the valuation of Boardwalk (BELT, $22.00) which sells for around 5 times book value and 36 times cash flow. Normally when a stock trades at very low valuations, it indicates the company is in some sort of distress. But this is not the case for IPG, as it sports a conservative balance sheet and debt ratios, and meanwhile revenue, cash flow, earnings, and assets are all growing rapidly. I am guessing the low valuation is in large part due to the fact that publicly traded real estate companies with a market cap of less than $50 million won1t show up on a lot of radar screens (IPG1s being $42 million). And it has a fairly recent history as a publicly traded company. The 4.25 million shares issued last year at $0.94 that were released for trading in March have also been feeding into the market, helping to pull the stock down since then. All these items suppressing the stock price are changing now, coinciding with what looks like a recent breakout from a technical bottom on the stock chart. The company1s asset base is rapidly growing, to the point where it will start showing up on a lot more radar screens soon, and the bargain priced valuations should attract investors seeking value or growth. The growth will be financed in part from the $35 million acquisition facility with GE Capital Canada announced on May 5th. The GE Capitals of the world don1t get involved with anybody, let alone a small cap company unless that company has a phenomenal management team, business plan, and asset base. Soon they will have two years of trading history under their belt. Also, IPG is only now for the first time promoting itself to retail investors, which coincides with appointment of John McKay as Director of IR in May. C.M. Oliver has given the stock a target of $3.75 based on 15 times estimated current year cash flow per share. Even if the stock only manages to reach 10 times 1998 cfps that still works out to $2.50 , or an 87% increase from the current price. This is not a "burning candle" trading stock, but one you can buy and hold in your RSP for a couple of years and look at every six months or so. Given we have plenty of much more speculative stocks in the EGS stable of companies, without any revenues or earnings, I see IPG as a welcome addition and an opportunity to diversify away from junior mining stocks. For further information contact John in Vancouver at (604) 718-4267, or toll free at 1-877-688-8886, and the web site is at: www.ipg.ca **************** GLTUA, Marcman