Why the Charter Hall share price is up nearly 30% in 2019

Shares in underrated growth stock Charter Hall Group (ASX: CHC) are trading near all-time highs.

| More on:
asx shares higher

The Charter Hall Group (ASX: CHC) share price closed at $9.31 on Friday afternoon, having reached heights of $9.46 after opening the year at $7.35. The share price of Australia’s leading property manager has risen nearly 30% in 2019, following a positive update from the company.

Smashing expectations

In late February, Charter Hall Group issued the market with a revised and upgraded guidance on its earnings for the FY19. A stellar first half saw the company’s after-tax operating earnings grow nearly 16% in comparison to previous guidance of 8%-10%.  Revenue for the first half of 2019 increased 19.5% to $155 million, in addition to growth of 11% in net profit of $113 million and a 13% increase in operating earnings of $108 million. Funds under management also grew by a staggering 22%, which sees the company overlooking a diversified portfolio worth over $28 billion. The rationale for this growth is pinned on the company’s acquisition of Folkstone funds management platform and an increase in collection of fund management and performance fees.

Blasting the past

For a while, real estate companies listed on the stock exchange offered safe, predictable returns as their prices mirrored those of government bond yields. The advent of more aggressive growth strategies and taking advantage of a flexible balance sheet has seen companies like Charter Hall Group achieve returns of nearly 60% per annum.

Charter Hall Group operates a diverse portfolio that includes; industrial sites, shopping centres, childcare centres and commercial office space. Despite the clouds of concern about falling prices hanging over the property market, the company’s business model has seen Charter Hall buck the trend.  The company’s earnings are based around collecting property management and base fees which is supplemented by returns from developmental profits. This business model allows Charter Hall Group to outperform the earnings growth and return on equity in comparison to traditional property managers.

Foolish takeaway

In my opinion, Charter Hall Group is one of the most underrated growth stocks listed on the ASX. As investors look to take profits, the future should present some good buying opportunities for shares in Charter Hall Group. If you really suffer from fear of missing out, global logistics company the Goodman Group (ASX: GMG) is another player in the sector which could be worth taking a look at.

Avoid FOMO on great dividends as well by checking out our Top 3 Dividend Shares for 2019 below.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

Big green letters spell growth, indicating share price movements for ASX growth shares
Growth Shares

2 ASX growth shares analysts love

If you’re looking for some growth shares to add to your portfolio this week, then you may want to look …

Read more »

Graphic showing yellow arrow above vertical columns indicating a rising share price
Growth Shares

2 compelling ASX growth shares that are now great value: brokers

Key points The share prices of both Airtasker and Lovisa have fallen in recent weeks. Brokers think they look like …

Read more »

Surge in ASX share price represented by happy woman pointing to her big smile
Growth Shares

2 exciting ASX growth shares tipped as buys

There are a lot of growth shares for investors to choose from on the Australian share market. To narrow things …

Read more »

share price gaining
Growth Shares

Are these 2 high-growth ASX shares now beaten-up opportunities?

Key points The share prices of Australian Ethical and Xero have fallen heavily in 2022 so far Australian Ethical’s share …

Read more »

Man presses green buy button and red sell button on a graph.
Growth Shares

3 ASX shares brokers have named as buys

If you have room in your portfolio for some new additions, then you may want to take a closer look …

Read more »

An executive in a suit smooths his hair and laughs as he looks at his laptop feeling surprised and delighted by the VAS ETF share price gains on the ASX
Growth Shares

2 ASX 200 shares with major upside potential

Due to the recent market volatility, there are a number of ASX 200 shares trading notably lower than recent highs …

Read more »

happy investor, share price rise, increase, up
Growth Shares

2 ASX growth shares Goldman Sachs rates as buys

Are you looking for some growth shares to buy? If you are, you may want to check out the ones …

Read more »

chart showing an increasing share price
Growth Shares

2 fast-growing ASX shares rated as buys in this correction

Key points Adore Beauty and EML are both growing rapidly and are good value according to experts Adore Beauty is …

Read more »