AGI:PHL - Embedded Expectations Analysis - 2018 05 25
Alliance Global Group, Inc. (AGI:PHL) currently trades near recent averages relative to Uniform Assets, with a 1.0x UAFRS-based P/B (V/A′). At these levels, markets have somewhat bearish expectations for the firm, and are pricing in expectations for Uniform ROA to fade below cost-of-capital levels, from 6% in 2017 to 3% in 2022, accompanied by 13% Uniform Asset Growth going forwardSpecifically, markets appear concerned about the firm's ability to improve their operational efficiency and achieve timely completion of the Grand Wing this year, which would add three more hotels and increase retail and gaming areas in their operations. Moreover, markets also appear to be concerned about potential delays in AGI's expansion plans in Boracay as a result of the rehabilitation initiative for the area, and may lack confidence on the value proposition of the newly placed Fundador store
Alliance Global is a holding company, with interests in the food and beverage business (manufacturing and trading of consumer products), real estate (investment in and development of real estate, lease of properties, hotel operations and tourism resorts businesses), tourism-entertainment and gaming, and quick service restaurant (McDonald's) business. Through its subsidiaries and associates, Co. is engaged in providing and developing products and services that cater to the needs, demands and aspirations of its target markets. Co.'s segments include: Megaworld, Travellers, Golden Arches Development Corporation (GADC), Emperador, and Global-Estate Resorts, Inc. (GERI).
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