Shares for Aveo Group Ltd [ASX:AOG] have fallen to $2.40, despite revised earnings figures for 2018.
Aveo Group is a property and investment group, first listed on the ASX in 1993, whose primary focus is retirement homes.
Why has the Aveo Group share price been hit again?
The company continues to spiral into the negative, even after it upgraded its guidance earnings for FY 2018 last week.
Aveo’s higher earnings forecast is being driven by new developments profits, but this doesn’t seem to be transferring into positive sentiment by investors.
Rather, the downturn has become a bit of a pattern for Aveo over the past year. Numerous investigations into Aveo’s alleged maltreatment of the elderly have become a serious news story, creating a lot of negative press.
The company has previously said that it is working on improving its relationship with customers and investors by delivering clearer contract terms for its residential and retirement properties, after a class action was filed by former residents.
Aveo CEO, Geoff Grady, said:
‘The package of new initiatives that we introduced last August — especially the money back guarantee and shortened buy-back period — have been implemented and very well received by residents and other stakeholders.’
What does this all mean for Aveo in the future?
The company’s earnings potential and efforts to regain consumer trust could make it a long-term buy — but it will greatly depend on their ability to protect their reputation.
As one of the biggest providers of residential care for the elderly in Australia, it will be interesting to see how Aveo’s share price stacks up against an ageing population and a slowing housing market.
For Markets & Money
PS:Aveo Group has already seen a steady share price decline, but Markets & Moneyeditor Vern Gowdie has found five other stocks that he believes could be ripe for a much larger, faster fall. He explains why in his free report, ‘Five Fatal Stocks You Must Sell Now’. Download your free copy here.