Patience is a virtue, the bargains are to be found in Woolworth's shelves, I am saying that REIT's charts are telling me that now is a good time to buy in for the long term.
See 10 year share price chart for the REIT's below which show that since the 09 lows the share price continue to find higher levels of support, this means the fundamentals are improving and it aint a falling knife.
Patience is a virtue, the bargains are to be found in Woolworth's shelves, I am saying that REIT's charts are telling me that now is a good time to buy in for the long term.
See 10 year share price chart for the REIT's below which show that since the 09 lows the share price continue to find higher levels of support, this means the fundamentals are improving and it aint a falling knife.
I really don't care much for charts - prefer to focus on the fundamentals.
Sector is 1.3x Book value. And remember, unlike industrial companies, most REIT assets are independently valued on a regular basis, so Book is a real measure of value . Last time the sector was 1.3x book was 2007.
Also, lots of office supply coming is Sydney & Perth. Incentives already +30% in these markets - which means cash flow per share much lower than EPS.
Mid sector retail on the nose - VCX selling $750-$1000m of shitty malls because their future is bleak. The company admitted this will knock 5% from EPS. I'm not convinced they will find buyers at book value.
IOF under offer from DXS. This may be contested, but after there not much left in the M&A sphere (maybe MGR/SGP).
GPT is a basket case. IPO'ed in 1971 for $10 per share. Currently $4.75
I love the metal Jimbo - I get to work with gold, silver, platinum, and stainless steel and I love yellow gold above the rest.
But it's a shit investment that is about to fall below $1000 USD per ounce. The Aussie goldbugs might save their ass because the AUD is also tumbling, but that's just a consolation prize.
Yup, gold in USD is not so good... in the same way Australian Property in USD is not so good..
Gold has certainly taken the worst beating of the two, but I would still rather have select American Property right now than Gold or Australian Property
GPT is a basket case. IPO'ed in 1971 for $10 per share. Currently $4.75
One mans trash is another mans treasure. Their share price is now three times higher than it was in 09, buy high sell higher and all that.
As for fundamentals their profit in FY15 was up 75% on previous year, earnings per share grew 6%, total portfolio occupancy is 95% and sales are up to decade highs increased 5% last years and are even stronger at this point in time.
One mans trash is another mans treasure. Their share price is now three times higher than it was in 09, buy high sell higher and all that.
As for fundamentals their profit in FY15 was up 75% on previous year,
Driven by valuation gains - not cash-flow. And note, you are already paying more than valuation. Be careful not to count the numbers twice!
Quote:
earnings per share grew 6%,
By breaking hedging contracts and re-pricing debt at a lower rate. The benefits of the lower rate = NPV of break costs. No value add. Simply converting capital to income. Unlikely to continue as most of their debt is now at market.
Quote:
total portfolio occupancy is 95%
It has always been in the +90% - even during the 1991 recession. Numbers heavily skewed by Retail assets. Does not mean it is performing well.
Quote:
and sales are up to decade highs increased 5% last years and are even stronger at this point in time.
I actually like GPT's retail. Much better than most except SCG. It's just that being a diversified, I think the mandate is too wide - leads to poor discipline, and therefore poor long term performance.
I like the if there is ever a good time to get into REIT's as along term share investment then now is the time to think about it as opposed to buying into a falling share like a gold miner. That's not to say that I am buying either, my days of day trading are over and my shares portfolio is under management, I tick boxes once a year and that is about it.
Yup, gold in USD is not so good... in the same way Australian Property in USD is not so good..
Gold has certainly taken the worst beating of the two, but I would still rather have select American Property right now than Gold or Australian Property
Good luck getting the Australian government to accept USD for stamp duty on a house.
So your preference is for people who try and make free money for doing nothing productive (property "investors") over those who simply try and protect the money they have already earned through sweat and toil (gold holders)?
I'm not sure what you're driving at here Jimbo - you know what I think of our housing market.
But why would I feel more sympathy for a gold investor than a property investor? Why do you think those that clip the ticket on a gold transaction are more virtuous than those that sell investmemt apartments?
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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