Colliers International Group (TSX: Cigi) is a Canadian Real Estate Services Company. Especially as a commercial real estate agent, it is a great presence in the Canadian and international markets. The business model of Colliers is quite unique among Canadian real estate companies. Neither a real estate restraint (Reit) nor a real estate developer, it rather serves as a broker for buyers and sellers of considerable commercial properties. It also has secondary business activities in real estate investment management, where assets are treated for investors with a high network value.
Last month Cigi shares collected 19%. Despite that, almost nobody is talking about the stock. The unique business mix and the market position of Colliers make it an intriguing company, but is the shares a buy? In the subsequent sections I will try to answer that question.
What does necklace does
As mentioned earlier, Colliers International is involved in real estate agent services and real estate investment management. Subcategories within these broader categories include the following:
- Sale of real estate: Surveillance commercial transactions, just like a broker helps you sell your house.
- Insolvency and restructuring: Helping struggling investors in real estate to manage their insolvency.
- Property Management: Acting tasks such as repairs and rental collection for landlords.
- Valuation: Appreciate characteristics.
- Real estate investment management: Managing money that investors have assigned to Canadian real estate.
- Engineering: Colliers also has a real estate consultancy firm that advises on real estate and infrastructure projects and utilities.
This is a pretty diverse company book. While many Canadian companies, public and private, do some Of these activities, Colliers creates’ dealing with all important synergies. It can therefore be said that necklines have something of an “ecosystem” effect, which can help you maintain customers.
Recent Income
The most recent income from Colliers were mixed. The company defeated in an adapted income but missed the reported income. Some marking statistics include the following:
- $ 1.35 billion in income, an increase of 18%.
- $ 180 million in adapted income before interest, taxes, depreciation and amortization (EBITDA), an increase of 16%.
- $ 1.72 in adapted profit per share (EPS), an increase of 26%.
On a composite basis of five years, the growth rates in these categories are here:
- Proceeds: 12.7%.
- 16% in EBITDA.
- 4.2% in EPS.
In summary, Colliers has grown a lot, both in the backlog of 12 months and in the past five years. It is a bit disappointing that the five-year-old CAGR growth in the profit is dramatically behind the growth rate of sales, although the growth rate of the free cash flow (FCF) was 15% CAGR in the same period.
Valuation
Last but not least we can look at some valuation multiples for necklaces. They include the following:
- 25 times income.
- 1.55 times sales.
- 5.8 times book value.
- 28 times cash flow.
This part of the analysis is not so flattering for necklaces compared to the others. 28 times cash flow is quite pricey for a real estate company. Investors will be sure that Cigi can continue growing before they invest in it, because it is not worth the asking price in a scenario without growth.
Fool
Taking into account both the performance and the valuation multiples, I would call Colliers a hold. It is a fairly good company, but at the moment a bit pricey.
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