Wednesday, April 10, 2013
S-REITs: Capitamall Trust - Stability and Sustainability
This post is a follow up on my previous post on Capitamall Trust being a deep value play. Capitamall Trust is Singapore's largest REIT and since its inception in July 2002, it has returned a total of 218.5% as of 31st December. The REIT is stable and has a distribution yield of 4.39%. The REIT has 15 properties that are strategically located and well managed. Management is also actively involved in Asset Enhancement Initative (AEI) and with the completion of Westgate in Jurong East, it looks to provide higher returns. For readers who wants to know more about Capitamall Trust and why it is a good, undervalued stock, UOB Kay Hian has a good presentation deck on Capitamall Trust. Hope this will give all readers a better understanding as investors should only invest in what we know! Have a profitable week ahead!
Monday, April 8, 2013
Saturday, April 6, 2013
Reit List Tracker
With the increased interest in SReit, I will be publishing the following SReit tracker on a regular basis. The tracker shows the brokerage house recommendations and their view of the intrinsic value.
Of the REITs listed, CapitaMall Trust is the most deeply valued. To read more about CapitaMall Trust, please refer to my previous article
Friday, April 5, 2013
S-REITs: Capitamall Trust - Deep Value at Current Price
In the past year, S-REITs have been singled out as one of the best performing sector stocks in Year 2012. Stock price of most REITS have increased 20% -50% in the past year, making it fairly valued in the market. For investors who are still interested in investing in S-REITS, OCBC has recommended Capitamall Trust as a deep undervalued S-REIT which has been a laggard as compared to the other REITS. Hope everyone will have a profitable week ahead :)
How to find value in stocks
As the oldest rule in investing advocates investor to buy low, sell high. This essentially means that the goal of all investors is to buy an asset (stocks, bonds, gold etc.) for something less than you can sell it for. In order to do that, investor will have to be able to assess the value of the stock. In this article, we’ll go over the metrics on how to identify value in stocks.
Consistent increasing sales, income and cash flow
The first step to identify value is to determine if the stock has a history of consistently increasing earnings, sales and cash flow over a period of 5 – 10 years. We will use Cisco as an example in our illustration below. The earnings, sales and cash flow figures can be obtained from financial websites such as Google Finance, Morningstar. Below is a screenshot from Morningstar that shows that Cisco has increasing sales, net income and operating cash flow over the past 10 years.
High Gross Margins
The second metric to look at is the gross margin. Gross margin is defined as a company’s total sales revenue minus the cost of goods sold, divided by the total sales revenue. A high gross margin provides an indication of the economic moat of the business. Cisco below has shown a consistent high gross margin above 60% which indicates that it does has some economic moat as shown by its market leader status in server and routers.
To read the rest of the article, click here
High Gross Margins
The second metric to look at is the gross margin. Gross margin is defined as a company’s total sales revenue minus the cost of goods sold, divided by the total sales revenue. A high gross margin provides an indication of the economic moat of the business. Cisco below has shown a consistent high gross margin above 60% which indicates that it does has some economic moat as shown by its market leader status in server and routers.
To read the rest of the article, click here
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