"This is an excellent time to increase exposure in the value creation capabilities of Alfred Akirov," says Leader Capital Markets analyst Lena Itzkov in a review of Alrov (Israel) Ltd. (TASE: ALRO) and its subsidiary Alrov Properties and Lodgings Ltd. (TASE: ALRPR).
Alrov Israel chairman and CEO Akirov owns 70.3% of the company through Akirov Holdings (1999) Ltd., and Alrov Israel owns 87% of Alrov Properties. The companies develop and own luxury residential, office, and hotel projects in Israel and Europe.
Itzkov says that, in recent years, Akirov has "demonstrated entrepreneurial ability, as reflected in impressive and highly profitable projects. He has also spotted trends at the beginning. He was one of the first to see the potential of luxury high-rises in Tel Aviv, with the Akirov Towers."
Itzkov adds, "We also see the success of Jerusalem's Mamilla project, which has become a landmark in the city, further proof of Akirov's ability." Leader also cites Alrov Israel's financial soundness, with a debt-to-balance sheet ratio of 68%, as another reason to invest in the company.
Itzkov sees strong potential in Alrov's hotel ventures, despite the relatively high risk of the hotel industry. She says, "The hotels industry should become an important part of Alrov's business in the coming years. The company's hotels enjoy prime locations in the world's tourist capitals, with two overseas hotels due to open in 2011." The reference is to the Conservatorium Hotel in Amsterdam and the Cafe Royal Hotel in London, both of which are under construction.
Itzkov gives Alrov Properties an "Outperform" recommendation with a target price of NIS 77, 29% above today's opening price. She gives Alrov Israel a "Market perform" recommendation with a target price of NIS 130, 14.5% above today's opening price. Alrov Israel rose 0.6% by early afternoon to NIS 114.30, giving a market cap of NIS 1.55 billion, and Alrov Properties rose 8.5% to NIS 64.72, giving a market cap of NIS 1.23 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2010
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