target

Just received the latest research note from my broker - Euroz. They've got a target set at $3.07.

Investment Case:
"AHE offers exposure to a strong business model with a favourable long term outlook.
AHE is well placed to benefit from consolidation opportunities for automotive dealerships in Australia.
AHE offers an attractive dividend yield of 7% fully franked for FY10.
AHE is trading on a normalised PER of 10x, a relatively cheap multiple in our view given the high barriers to entry and managements strong track record.
Our 12 month price target is $3.07 per share, set at 12x our EPS forecast of 25.6 cents for FY11.
AHE has historically traded higher than 12x earnings and we expect a re-rating to occur as automotive trading conditions continue to improve."

I think the joker in the pack could be the Perth hail storms. I witnessed it first hand and it struck at 4.10pm (start of peak hour) and it was truly amazing. Tens of thousands of cars have been damaged, many written off.

QBE released an announcement saying it cost $106m. The total insurance bill so far is reported at $650m. If half of that amount are cars, then I would be thinking the dealers would be very busy. AHE's core market is WA and people would be cashed up with insurance cheques.

We'll know in a couple of months.

Pep

PS. AHE was fully insured.