What’s Happening to the Eureka Group Holdings Share Price?

Real estate market
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What Does Eureka Group Do?

Eureka Group Holdings [ASX:EGH] is a property asset manager of senior independent living communities across Australia. EGH focuses on affordable monitored rental accommodation. They provide an alternative to expensive retirement villages, bridging the gap between independent living and aged care. As the baby boomer generation enters this phase, one would think this is a market of increasing demand. That’s the story, but what is the chart telling you?

What does the chart look like?

I always find it helpful to bring up a chart. Here’s the daily chart of Eureka Group.

terencechart

Source: STEX


Eureka Group started trending up in September 2014, and that trend hasn’t changed at the time of writing.

What now for Eureka Group Shares?

Results from the company’s half yearly report released in late February were positive, very positive. Net profit after tax for the six months up 80%.
Do note how the share price has reacted to the positive February results. We could then expect further positive news to come from this company. I don’t have a crystal ball, so let’s wait and see. I think you are seeing this now, yes?

But here is the important stat you can draw from the half yearly report: total assets up 89%.
You see, this company is going from an operator only model, to an owner/operator/manager model. In other words, they’re on a new strategy of acquiring ownership of the land underneath. And they have been going on veritable spree, acquiring seven freehold villages in the last 15 months.

Knowing the 18 year real estate clock as you do, you know exactly how this places the company.
If by chance you are unaware of the 18 year real estate cycle, then do go here. You really are at a substantial investment disadvantage until you come to this understanding.

Cheers,
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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