We caught up with management of Aveo Group (AOG) recently

We caught up with management of Aveo Group (AOG) recently. We are confident they are on track to significantly ramp up earnings from the retirement business over the next few years. In the near term this will come from low risk brown fields development and a ramp up in already contracted improved DMF earnings. They also talked of upside in NTA from developing out its non-retirement portfolio at higher margins than selling at NTA. We estimate this could provide a 30% lift to the current $2.85 NTA valuation. We also take comfort that the new in-house care strategy will result in higher returns to AOG shareholders vs outsourcing this highly lucrative service. The next positive price catalyst should come from further non-retirement asset sales. We continue to recommend buying up to at least the current $2.85 NTA valuation. Longer term we see this as a true growth company as retirement earnings ramp up.