We came across a bullish thesis on AMREP Corporation (AXR) on Leahi Capital’s Substack by Leahi Capital. In this article, we will summarize the bulls’ thesis on AXR. AXR Technologies, Inc.’s share was trading at $30.30 as of Sept 24th. AXR’s trailing P/E Was 17.22 according to Yahoo Finance.
Aerial view of a commercial real estate development in progress, showcasing the company’s mastery of the sector.
AMREP is a land development and homebuilding company that mainly operates in Rio Rancho, New Mexico, Sandoval County, and adjoining areas of New Mexico. The area benefits from nearby tech companies like Intel and HP, which are major employers. The company’s land sales make up about 65% of its revenue, though recent sales of developed land have slowed compared to previous years. Despite rising interest rates and fewer sales Rio Rancho’s housing market has stayed healthy.
AMREP owns around 17,000 acres of land in New Mexico, most of which is undeveloped. The company has been selling this land over time, but valuing it is difficult due to the uncertainty of how attractive the land will be to buyers. Prices for the land have varied widely in the past, from as low as $2,600 per acre to as high as $38,000 per acre.
AMREP Corp (AXR) looks interesting because it owns a lot of land in Rio Rancho, New Mexico, which is worth much more than what’s listed on their balance sheet. They have about 17,000 acres, listed at $67 million, but it could actually be worth between $237 million and $419 million. Recent sales show strong prices, especially for residential properties. The company has a solid financial position with only $5 million in liabilities and $30 million in cash. They’ve also been buying back shares, showing management’s commitment. Insiders, including board members, own a lot of the stock, indicating their confidence in the company’s future. While it might take time to fully realize the value of their land and selling it at good prices could be challenging, AMREP still has significant growth potential.
AMREP Corporation is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held AXR at the end of the second quarter which was 1 in the previous quarter. While we acknowledge the risk and potential of AXR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AXR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.