Posted by Jack Macferson | 10:57 PM | | 0 comments »

Best Time For the Investors of Real Estate

NEW DELHI: Boom in the real estate sector is reflecting in share prices of realty companies, which have gone up by three to 40 times in the last one year. Earnings per share (EPS) of these companies have also improved, but not to the extent that is reflected in share prices.

According to merchant bankers, this growth has happened after the market re-rated share prices of these companies, taking into account future cash flow, on the basis of huge amount of land they have acquired.

Merchant bankers feel it looks like the glory days of 1999-2000 are back for the real estate stocks. A senior merchant banker, who is managing a public offering of a realty company said investors should desist from putting money in these stocks, which are quoting at huge multiple of underlying earnings.

They should better invest through mutual funds in these stocks.Unitech has seen maximum jump in share price — a growth of over 40 times, from Rs 10 in November, 2005 (after adjusting for bonus and share split) — to Rs 405 on Friday.

So real estate at the moment is on a go......
And that is good for the investors..........

Source: Times of india