Psagot Ofek starts "low-risk" Alony Hetz with Buy rating

Psagot Ofek is starting analytical coverage of Alony Hetz Properties & Investments (TASE: ALHE)  with a Buy rating. The brokerage feels that the risk in the Alony Hetz real estate group is relatively low and that it proffers growth potential.

"Based on the combination of the potential in Alony Hetz's affiliated companies and the company's proven management skill, the low risk involved in the company's operations and the discount at which its stock trades, we believe that Alony Hetz's present share price is cheap," the  Psagot Ofek equity analysts wrote.

Alony Hetz's main holdings are 78% of Amot Investments, which operates mainly in Israeli yield-generating properties, and 15% of PCP, one of the biggest publicly traded property companies in Switzerland.

It also owns 25% of the British real estate investment trust Brockton Capital, and an interest in an Indian property investments firm.

Alony Hetz is also exposed to the United States market through its 7% holding in Equity One, which is controlled by another Israeli company, Gazit Globe.

Recently Alony Hetz began investing in Swedish real estate through a local company, but it's started small, with a $15 million investment.

Psagot Ofek's 12-month price target for Alony Hetz is NIS 26, which is 13% above its starting level on the Tel Aviv Stock Exchange today.

Moreover, the brokerage's valuation model for Alony Hetz is conservative, factoring in no management premium whatsoever, or future investments.