Welcome to my investment blog where I share with you my analysis of REITs in Singapore.

I hope that my investment philosophy will bring me a steady stream of income apart from my job. I am aiming for at least $3,000 per month which can sustain the current expenses of myself and my family.

Do enjoy reading my blog and post any comments that you have. I welcome them because it is a time to learn from each other.

When I am looking at investing in REIT, here are some of the guidelines that I am looking at. Feel free to comment on it. I am willing to listen to ideas.

-> at least 8% yield.
-> Price that is lower than its NAV.
-> Low gearing (if possible)
-> High secured NAV.

Current Dividend income is $3,800/month.

Thursday, September 29, 2016

Analysis of Rickmers Maritime - Make or Break Time

Current Price on 23rd September 2016 = $0.043
  • Yield = No Yield  
  • Price-to-book Ratio = 0.093
  • Assets per unit = $1.004
  • Debt per unit = $0.542 (including current liabilities)
  • Gearing = 54%
This is one Business Trust which is entering crisis mode where either it makes it or it goes bust with all shareholders receiving nothing back. It is asking shareholders and noteholders to consider the current proposal. But before that, let's take a look at the statistics.

With price-to-book ratio of 0.093, it means we are buying at 9.3% value. Of course, this is meaningless because it is going bust soon. However, if their proposal goes through, the statistics will look like this.

  • Yield = No Yield  
  • Price-to-book Ratio = 0.202
  • Assets per unit = $0.402
  • Debt per unit = $0.189 (including current liabilities)
  • Gearing = 47%
With debts maturing at only 2021, it gives them 5 years to work out further details, conserve cash and float through this difficult periods. Plus we are actually buying at 20.2% value and not really 9.3% which was stated earlier even if we buy now. With reduced interest rates, I hope that they are able to float.

This looks like a distress assets with extremely bad credit rating. The question is whether are we willing to give them another chance at probably realize some value from the investments which are actually ships which transport containers. To me, it looks more like making a gambling bet, something which I won't do. Maybe after they have voted for the proposals then I can look at it again. 

1 comment:

  1. I'll give this one a miss since I'm stuck with FSL. FSL seems to be turning around since the new management took over a few years ago.