Current Price on 25th Apr 2012 = $0.900
- Current Yield = 7.32%
- Price-to-book Ratio = 0.603
- Assets per unit = $2.803
- Debt per unit = $1.312
- Gearing = 46.8% (not considering CPPU as assets)
- Secured NAV = $0.378 (41.95%)
FCOT has announced the sale of Keypoint for $360 million which gave us a realized profit of $72 million. Thus, our NAV has increased. According to my estimates, it is $1.491 which is much higher than its trading price. This is the surprise which I have mentioned earlier last year.
I am expecting FCOT to use it to pay off CPPUs which the interest rates are high. I have not considered CPPU as assets before so I has not affected my analysis. Just that I hope DPU will rise due to this repayment. (Unless the CPPU holders are going to convert to ordinary units which is favourable to current unitholders as they will be paying $1.18 for each unit compared to current price of $0.90)
Ever since my last analysis, the price has gone up a lot so the yield stays at 7.32% which is not favourable to my criteria. However, it is still trading at 40% discount to NAV so I am still holding on to it until its yield reach 7%.
I am expecting FCOT to use it to pay off CPPUs which the interest rates are high. I have not considered CPPU as assets before so I has not affected my analysis. Just that I hope DPU will rise due to this repayment. (Unless the CPPU holders are going to convert to ordinary units which is favourable to current unitholders as they will be paying $1.18 for each unit compared to current price of $0.90)
Ever since my last analysis, the price has gone up a lot so the yield stays at 7.32% which is not favourable to my criteria. However, it is still trading at 40% discount to NAV so I am still holding on to it until its yield reach 7%.
I know its fallen under the 8pc minimum dividend you have, but at a 40 pc discount to NAV - that's fantastically undervalued still. If something is selling at that much below its actual value, then you have a huge margin of safety. All this is my opinion of course, and each person must make their own decisions according to their criteria, but I generally give highest priority to margin of safety, although dividend rate is of course important as well.
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I think that is a very good point which is why it is one of my criteria. I believe I can achieve both with some REITs that are available in the market.
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