- Yield = 9.73%
- Price-to-book Ratio = 0.892
- Assets per unit = $2.147
- Debt per unit = $1.216 (including current liabilities)
- Gearing = 56.6%
Croesus Retail Trust just announced their acquisition and rights issue which sort of neutalized the effects of acquisition. Here are the statistics.
Before acquisition, yield is 9.73% which is already very high. Moreover, price-to-book ratio is 0.892 which means we are buying at around 10% discount which is good. However, their gearing is 56.6% which is extremely high.
With the acquisition and rights issue, yield increases to 9.86% which is really not a lot considering that they needed a rights issue to finance its purchase. Moreover, price-to-book ratio will increase to 0.926 which means valuation wise, it is getting more expensive. Gearing falls to 52% which is also their intention.
Their rights issue is priced at $0.61. Thus, I believe that there will still be a demand for the rights issue since it is a sure win strategy aka hold a small portfolio, subscribe to rights and apply for excess rights. Price has already dropped to $0.83 so earning-wise won't be significant. However, due to budget constraints, I am not participating.
Before acquisition, yield is 9.73% which is already very high. Moreover, price-to-book ratio is 0.892 which means we are buying at around 10% discount which is good. However, their gearing is 56.6% which is extremely high.
With the acquisition and rights issue, yield increases to 9.86% which is really not a lot considering that they needed a rights issue to finance its purchase. Moreover, price-to-book ratio will increase to 0.926 which means valuation wise, it is getting more expensive. Gearing falls to 52% which is also their intention.
Their rights issue is priced at $0.61. Thus, I believe that there will still be a demand for the rights issue since it is a sure win strategy aka hold a small portfolio, subscribe to rights and apply for excess rights. Price has already dropped to $0.83 so earning-wise won't be significant. However, due to budget constraints, I am not participating.
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