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AXR, MDC, Building Resident - Commercial Stocks Undervalued

^{Published on 2011-05-10 06:30:32 - WOPRAI}
 

May 10, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Building Resident - Commercial sector and these stocks are the most undervalued as of today. AMREP CORP (NYSE:AXR), MDC HOLDINGS INC (NYSE:MDC) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     AXR        AMREP CORP                          $10.19         $15.34         33.60% Undervalued          Building Resident - Commercial
     MDC        MDC HOLDINGS INC                    $27.44         $37.42         26.70% Undervalued          Building Resident - Commercial

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

AMREP CORP (NYSE:AXR) - AMREP Corporation, through its subsidiaries, engages in real estate and media services businesses. The companys real estate business sells developed and undeveloped lots to national, regional, and local home builders, as well as to commercial and industrial property developers. As of April 30, 2009, the companys real estate business owned approximately 17,340 acres in Rio Rancho in Sandoval County near Albuquerque, New Mexico; a residential property of approximately 160 acres in Colorado; and a property of approximately 10 acres zoned for commercial use in Colorado. Its media services include subscription fulfillment and related services for publishers and other customers; distribution of periodicals to wholesalers in the United States and Canada, and other foreign countries. The company also provides packaging services, which include receiving, warehousing, packaging, and shipping services; and temporary staffing services that provide temporary employees to local companies. AMREP Corporation was founded in 1955 and is based in Princeton, New Jersey.

MDC HOLDINGS INC (NYSE:MDC) - M.D.C. Holdings, Inc., through its subsidiaries, provides homebuilding and financial services in the United States. It operates in two segments, Homebuilding, and Financial Services and Other. The Homebuilding segment constructs and sells single-family detached homes to first-time and first-time move-up homebuyers under the Richmond American Homes name. The Financial Services and Other segment originates mortgage loans primarily for homebuyers, as well as brokers mortgage loans for origination by outside lending institutions. This segment also offers third party insurance products and title agency services to its homebuyers, as well as provides general liability coverage for construction work performed associated with closed homes. The company was founded in 1972 and is based in Denver, Colorado.

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