NEW YORK, NY / ACCESSWIRE / September 28, 2015 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it recently initiated coverage of ROI Land Investments, Ltd. (ROII) with a 12 month price target of $4.52.
The report is available here: ROII Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Headquartered in Montreal, Canada, ROII is focused on early stage land development for residential real estate. Led by an experienced management team of established and well-connected real estate executives, ROII is focused on pre-development and entitlement approval of land – a targeted and potentially highly profitable area of residential real estate. ROII specializes in identifying and purchasing attractive vacant land in high growth areas according to strict analytical criteria. The company then enhances the land’s value through pre-development activity including managing the permitting and street-level infrastructure development of the land until it is construction-ready. Importantly, ROII is not a “land bank,” and seeks to reduce risk by developing quickly by working with local partners to reduce costs and arranging a clear exit strategy with homebuilders or corporates – the company’s deals have included large clients such as LNG Canada and partners such as Coast to Coast Holding in British Columbia and Baessler Homes in Colorado. In our view, ROII offers an intriguing equity-based conduit for a high risk, high potential reward investment in a key niche of the residential housing market.
“Anchored by large residential projects in Dubai, British Columbia, and Evans, CO, ROII has outlined ambitious development plans that leverage its industry knowledge and financing network in the United States, its home market of Canada, Europe and the Middle East. The projects are centered in six key regions and have the potential to create significant value for the company over the next 12-36 months if ROII can execute on the capital raising and operational goals outlined by management,” stated Ajay Tandon, CEO of SeeThruEquity. “We are initiating coverage with a 12-month price target of $4.52 per share.”
Additional highlights from the report are as follows:
Aggressive pipeline with potential for impact growth opportunities
ROII has outlined ambitious development plans focused in six key markets in the United States, its home market of Canada, and the GCC. The initial slate of projects has the potential to create significant value for the company over the next 12-36 months if management can execute on its capital raising and operational goals. The portfolio is anchored by a $100mn+ residential development play in Dubai in partnership with Sobha LLC, one of the largest and fully integrated developers in the region. ROII is developing three luxury apartment buildings in the middle of Sobha Hartland within Mohammed Bin Rashid Al Maktoum City, only minutes from the city center, comprising 300 units. ROII has already found a significant partner for its exit strategy, and expects to report material initial revenues from the project in 2016E.
Well-defined, focused process on a key residential real estate niche
ROII has assembled a well-defined, targeted strategy focused on land acquisition and early stage development of raw land for residential real estate developers. Specifically, the company operates in a four-step process: 1) Identify and acquire attractive land free of zoning restrictions; 2) Obtain the necessary permits and entitlements with local municipalities for residential pre-development; 3) Oversee outsourced development of technical and construction work to prepare residential lots and street infrastructure; and 4) Complete sale of subdivided land units or engage in a strategic partnership with large residential building developers. Importantly, as part of the decision to acquire new land, ROII management seeks large partners to secure a committed exit strategy if it is able to execute on developing the land through the permitting and infrastructure process. The company has already provided examples of this strategy, including a binding pre-sale arrangement with Baessler Homes, a well-respected local builder in Colorado, in which Baessler will acquire 1/3 of the company’s new development in Evans, Colorado.
Experienced management team
We see an experienced and well-connected management team as a critical factor for evaluating ROII, given the significant operational and capital raising hurdles that must be overcome for the company to meet its growth strategy. ROII’s management team has over 100 years of combined experience in real estate development, with over 1,000 lots developed in the last ten years and an extensive strategic contact network in the financial, construction, and real estate industries. Indeed, most recently, key members of ROII management founded and sold Azur Capital Fund LP, which management indicated was one of the fastest growing real estate lenders in Eastern Canada prior to its sale in 2014.
Initiate coverage with a price target of $4.52
Our analysis indicates a fair value estimate of $4.52 per share for ROII. If achieved, the target represents potential upside of 84.7% from the recent price of $2.20. We view ROII an intriguing equity-based conduit for a high risk, high potential reward investment in the residential housing market.
Please review important disclosures on our website at www.seethruequity.com.
About ROI Land Investments, Ltd.
ROI Land Investments, Ltd. (“ROI”) is a diversified real estate investment company specializing in land development. ROI’s business model consists of acquiring attractive land developments free of zoning restrictions, obtaining the necessary development permits, outsourcing the development of the infrastructure and profiting from the sale of the subdivided land units to known large regional developers.
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com