MeritValue

AMERICAN REALTY INVESTORS INC

ARLdata completeness 88%17 fiscal years on file
The thesis, from the filings

AMERICAN REALTY INVESTORS INC earns about 13% on equity, with a roughly flat share count. The applicable estimate puts fair value near $2.55 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$42M1$37.5M2$50.5M3$47.3M3$50M3
Net income$3.35M4$373.3M5$3.97M6−$14.7M6$15.7M6
Operating cash flow−$11.5M7−$45.4M8−$31.1M9$1.09M9−$5.55M9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$183.4M10$188M11$182.7M12$185.4M13$214.4M13
Cash & equivalents$50.7M14$113.4M15$36.7M15$19.9M15$14.2M15
Diluted shares16.2M16.2M16.2M16.2M16.2M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$382.25
your share of equity
Profit it earned you last year
$9.72
Free cash flow it threw off
—
Debt you’d be carrying
$132.72

10 shares is a claim on $382.25 of net worth that earned you $9.72 last year, against $132.72 of debt.

iii. Is this a good business?
Moat signal · return on equity
13% avg · 5y
FY21 1%FY22 61%FY23 1%FY24 -2%FY25 3%

It earned an average 13% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−0% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 17% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$2.55
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$3.97M
  • growthAssumed0.0%
Graham Number
$28.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001102238-24-000004 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001102238-25-000004 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001102238-26-000004 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001102238-24-000004 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001102238-25-000004 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001102238-26-000004 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001102238-24-000004 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001102238-25-000004 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001102238-26-000004 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001102238-23-000004 (LongTermDebt)
  11. 10-K · period ending 2022-12-31 · accession 0001102238-24-000004 (LongTermDebt)
  12. 10-K · period ending 2023-12-31 · accession 0001102238-25-000004 (LongTermDebt)
  13. 10-K · period ending 2024-12-31 · accession 0001102238-26-000004 (LongTermDebt)
  14. 10-K · period ending 2021-12-31 · accession 0001102238-25-000004 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0001102238-26-000004 (CashAndCashEquivalentsAtCarryingValue)