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know when to fold

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Super Contributor
glad I sold this when I did ...
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7 REPLIES 7
rosszar
Contributor
Not sure when you sold, but I have a tiny investment in this one and do not think I would sell now, would be on a reasonable yield at current price. Might even add some in future if price stays low, but would need to do some homework first.
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Super Contributor
I also wouldn't sell now. Looks due for a rally imo.
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Super Contributor
The problem IS what the answer to the question What gives rise to the present yield. The reason the yield is where it is is the lower quality of their properties which are not "a" grade - so this implies that if you (RI) want to raise capital its going to be difficult - who wants to buy also-rans? or not so goods? So that means the yield IS NOT GOING TO PUSH UP THE PRICE? property is clearly not a one way bet- not that it has ever been...quality is key. But that is not my view alone on this counter....
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Not applicable
a small fish in a big pond. Suspect balance sheet with no real assets and fully in debt. Only way for them to expand and grow is to raise capital on the open market - so expect many rights issues to come along the way.
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Super Contributor
I like her and will continue to accumulate as a Rand hedge. Together with ITU, CAPC, IAP, STP, MDP, MSP and others. All property stocks offer endless share issues but at around the ruling price which should track the portfolio value - it limits their price growth but they tend to provide a stable investment. They will not dump shares at way below book! Unless, of course, they get into a financial bind and then all bets will be off! This type of property company (STP) is far more flexible and nimble than the traditional "handful of assets" monster fund. They feed off the rate differential between a 6%+ (and growing) portfolio yield and a 3% loan rate. It is all about your view on interest rates - if it's still lower for still longer - these should be good investments. Ordinarily - you can't expect them to shoot the lights out - but then again - their model offers a good dividend yield and ensures that they are also less likely to collapse! Well run - they can crate enormous wealth over time - personally - I am allocating 30% of my portfolio to offshore property. If the markets accept a lower for longer model - these shares will need to play catch-up to bonds yileds - this could result in a 200% gain in prices. Not too shabby an upside kicker for an uber-conservative sector. Of course - at those levels - they would turn into share printing presses and would need to offload.
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Super Contributor
Yes but if you want to raise capital then you have to have something that people want -like I said the yield is high because of the quality of the stuff they own - and I for my twopence do not want to be stuck with not so good properties- into which more money must be sunk.. Nah...good luck.
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Super Contributor
?They buy and sell properties. When they are fully valued - they dump them to a bigger fund and move on to better yielding stuff. They own some very nice property. The yield is so high because they are a REIT! They are also not sinking capital into vast "A-Grade" money pits. As capital values rise - they gear up. Same as any other fund.
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