avj - cheap as chips

In a difficult market it is always interesting to note the companies quietly making new highs. One such stock is the homebuilder AVJ. The operate exclusively in the residential market with an emphasis on growth corridors, no exposure to inner city apartments and minimal exposure to first home buyers. Operating risk is thus somewhat less than for most other developers.
Baillieu forecast FY04 PER of 5.5 (falling to 4.8 in FY05)and 6.1% ff divvy yield (rising to 6.8% in FY05) which compares favourably (particularly on a risk adjusted basis) with the peer group.
The kicker could be that(according to Baillieu) the MD reckons that their inclusion in the ASX200 is imminent. At MktCap $400m odd they were always big enough but due to a significant shareholder base in Singapore did not qualify on the Oz free-float condition. Apparently this condition is now satisfied which means given the size of the company they should be a shoe-in for inclusion in the index.
So the prospect of index buying and an unwinding of the "Singapore retail discount factor" should see a rerating sooner or later. Baillieu argue that 2-3 points on the PER would not be unreasonable - this would imply a target in the range $2.60 - $2.90 compared to the current $1.90 odd.
Either way they are cheap as chips and worth considering.
I picked up some this morning at $1.90.