Aveo has single-handedly dragged the professional investor market back into the Australian retirement village sector where it has been missing since March 2008.

Last Wednesday Aveo’s share price hit $3.10 before settling back to $2.94 today – still a long way from $1.00 where it sat 29 months ago when Geoff Grady (pictured) took over as CEO.

Over the past seven days Barrons Asia has tipped Aveo as a ‘Hot Stock’. Morningstar’s Tony Sherlock says the senior housing market hasn’t seen the supply boom that other residential property has, meaning it could 'significantly outperform'. Australia’s ageing population means demand for retirement homes will exceed supply within the next five to seven years”.

Sherlock has a target price of $3.10 for Aveo while noting that others are talking about $3.30.

Morgan Stanley says there is a 60% – 70% chance of the stock ‘running high before the end of the calendar year’ and points to next weeks (November 17) annual general meeting for announcements to drive this.

What the analysts don’t mention are the number of structural changes and strategy initiatives that Aveo has introduced in the past 12 months, bringing care into their villages.

And there is more to come so watch this space – and their share price (despite running at up to 25 times their revenue value).

If Aveo does well, the whole sector will benefit with new capital – and executive talent – flowing in.

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