Aveo Has Demographics on Its Side (ASX:AOG)

Shares for Aveo Group [ASX:AOG] gained close to 6% today after management agreed to a takeover scheme from Canadian company Brookfield.

At time of writing, shares are trading at $2.12.

What happened to Aveo’s share price?

Brookfield is an alternative asset manager that owns and operates assets mainly focused on real estate, infrastructure, renewable power and private equity.

According to the terms, Brookfield is looking to pay $1.27 billion for Aveo, giving investors a cash payment of $2.195 per share.

Aveo Group owns, operates and manages 89 retirement communities across Australia with 13,000 residents.

The company has seen its share price trading lower in the last couple of years as the property market declined. Last November, share prices dived after the company announced that lower property prices were affecting retirees looking to sell their homes and move into retirement communities.

Aveo may see some relief if property has hit bottom after central banks lowered interest rates to record lows. Maybe.

But what makes Aveo interesting is that it has a global trend on its side: demographics.

How trends shape the economy

Our world population is ageing, especially in developed countries.

In Australia, boomers are getting older. As they do, they are looking increasingly at getting rid of their large homes and looking at downsizing or moving to retirement villages and homes.

The baby boomers are one of the largest generations in history and what they do will affect the economy. Where will boomers spend their money as they age?

And where are younger generations putting their money?

It’s one way to make money, by following trends that shape the economy.

We are already seeing quite a few trends developing and shaping from the newer generations.

Take for example, Beyond Meat Inc [NASDAQ: BYND].

Beyond Meat makes plant based burgers, in other words, fake meat. Its stock price has been booming since it listed earlier this year, as you can see below.

Beyond Meat Share Price Chart

Source: Yahoo Finance

We are seeing a change in the way we are consuming food, and Beyond Meat is creating a lot of interest. You can find out more about this ‘hamburger revolution’ trend here

Don’t get me wrong, I am not saying that you should jump in and invest in Beyond Meat…or Aveo.

But my point is that looking at developing trends and how people are spending their money could pay off.

After all, that is the definition of economics, the study of human behaviour, and their relationship and interaction with money.

Best,
Selva Freigedo

PS: The AI ‘mega-trend’ – four ways you could profit. Download your free report.


Selva Freigedo is an analyst at Money Morning. She has a background in financial economics, but what makes Selva´s experiences different to many are the places she has lived and worked. Born in Argentina, she has also lived in Brazil, the US, Spain, and now Australia. She has seen up close many of the economic phenomena that worry Port Phillip Publishing readers, like hyperinflation, bank bail-ins and governments burdened with so much debt it cannot possibly be repaid. Every week, she goes through each article, research note and recommendation produced by our experts around the world to give you information on how to build and protect your wealth. Selva packages the week’s best ideas into one easy to read report: Port Phillip Insider Extra.


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