Our opinion on the current state of ASTORIA(ARA)
Astoria Investments Ltd. (ARA) is structured as an investment company with the aim of providing investors access to a diverse portfolio of equities primarily located in developed economies. After a period of suspension from September 2020 to April 2021, the company's shares have resumed trading, albeit at a price significantly below its net asset value (NAV), which is a common situation that can offer potential value to investors if the underlying assets are sound.
Astoria has benefited from diverse investments, including a noteworthy venture during periods of civil unrest where it profited from the sale of "non-lethal self-defence" products. The company holds substantial stakes in other enterprises, including one third of Outdoor Investment Holdings and 35.7% in Trans Hex, although it has divested its interest in CNA. The resumption of trading on 19th April 2021 followed the distribution of 51.15 million shares, marking a pivotal point in the company's recent history.
For the year ending 31st December 2023, Astoria reported an increase in NAV of 3.4% in rand terms, amounting to 1454c per share. The management highlighted significant growth in USD NAV per share since taking over on 1st December 2020, with an impressive compound annual growth rate (CAGR) of 24.8%, translating into a total ZAR return of 137.6% at a CAGR of 32.4%.
However, the first quarter of 2024 presented challenges, as reflected in a headline loss per share of 115.26c, albeit an improvement over the previous period's loss of 125.31c. The NAV as of 31st March 2024 stood at 1385.02c per share, indicating a slight decline from the annual figures reported for 2023. This could be indicative of volatile market conditions or specific challenges faced by the assets within the portfolio.
One of the notable issues for potential investors is the liquidity of Astoria's shares, with only about R85,000 worth of shares traded per day on average, and frequent days with no trading activity at all. This low volume can pose significant risks when attempting to enter or exit positions and could contribute to price volatility.
Currently, the shares are under a cautionary notice, which typically indicates that there may be significant news forthcoming that could affect the stock's value. This status, combined with the share trading below NAV, suggests that Astoria could represent a good value opportunity, assuming the cautionary notice does not foretell negative developments.
Investors considering Astoria should weigh the potential for high returns against the risks of low liquidity and the ongoing uncertainty indicated by the cautionary notice. Monitoring the company’s announcements and understanding the nature of its diversified investments will be crucial for those looking to invest in Astoria.
Astoria has benefited from diverse investments, including a noteworthy venture during periods of civil unrest where it profited from the sale of "non-lethal self-defence" products. The company holds substantial stakes in other enterprises, including one third of Outdoor Investment Holdings and 35.7% in Trans Hex, although it has divested its interest in CNA. The resumption of trading on 19th April 2021 followed the distribution of 51.15 million shares, marking a pivotal point in the company's recent history.
For the year ending 31st December 2023, Astoria reported an increase in NAV of 3.4% in rand terms, amounting to 1454c per share. The management highlighted significant growth in USD NAV per share since taking over on 1st December 2020, with an impressive compound annual growth rate (CAGR) of 24.8%, translating into a total ZAR return of 137.6% at a CAGR of 32.4%.
However, the first quarter of 2024 presented challenges, as reflected in a headline loss per share of 115.26c, albeit an improvement over the previous period's loss of 125.31c. The NAV as of 31st March 2024 stood at 1385.02c per share, indicating a slight decline from the annual figures reported for 2023. This could be indicative of volatile market conditions or specific challenges faced by the assets within the portfolio.
One of the notable issues for potential investors is the liquidity of Astoria's shares, with only about R85,000 worth of shares traded per day on average, and frequent days with no trading activity at all. This low volume can pose significant risks when attempting to enter or exit positions and could contribute to price volatility.
Currently, the shares are under a cautionary notice, which typically indicates that there may be significant news forthcoming that could affect the stock's value. This status, combined with the share trading below NAV, suggests that Astoria could represent a good value opportunity, assuming the cautionary notice does not foretell negative developments.
Investors considering Astoria should weigh the potential for high returns against the risks of low liquidity and the ongoing uncertainty indicated by the cautionary notice. Monitoring the company’s announcements and understanding the nature of its diversified investments will be crucial for those looking to invest in Astoria.
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