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Saizen REIT: Cheaper please.

Tuesday, September 28, 2010

Quite recently, in LP's cbox, I mentioned that I was watching Saizen REIT like a hawk, believing that there would be some people who would lose patience and sell down their stakes. Today, it happened and I was waiting at 15c.  Buying at 15c is similar to what we would have paid for Saizen REIT last year in December.

Saizen REIT was sold down heavily, most of it at 15.5c, today for whatever reason. The lack of interest by the market at large in this counter is quite obvious as the MACD has been hugging the signal line. At below zero, the momentum is clearly negative.  The MFI has been forming lower highs, a sign of flagging demand. RSI shows a slowing of buying momentum. 16c could possibly be a strong resistance now as that is where all the MAs are approximating.

The annual report would be out soon and I would take some time to go through it but I doubt I would find anything unexpected.  Value is what we get and price is what we pay.  If Mr. Market is willing to sell to me an undervalued stock at a lower price, I would graciously (or greedily) accept.


Anonymous said...

Hi Ak,
Tks so much for the help with regards to the trading platform. Tks Hubert as well for the recommendation. Much appreciated.

I am holding onto some Saizen Reits as well and saw that price has fallen to 0.15 cents. Thinking to increase my holdings but at the same time worried that the price might fall futher due to heavy sell off...Will monitor your comments on this stock.

Tks again,

AK71 said...

Hi Naomi,

No problem. :)

Being cautious is never wrong but being overly cautious is. This is probably a truism. ;)

The question is when are we being cautious and when are we being overly cautious. That is a tough question to answer.

With Saizen REIT, fundamentally, it is deeply undervalued even at 16c. Even at 21c, it is still undervalued but probably "fairly" so. Investors in Singapore have a preference for REITs with most of their assets here.

Saizen REIT's fundamentals have been improving. If YK Shintoku's CMBS is refinanced successfully, it would be a huge positive catalyst for re-rating upwards. If YK Shintoku suffers a foreclosure, Saizen REIT's balance sheet would strengthen significantly and it would gain more than it would lose. A re-rating upwards would also be imminent in such a case.

I am not worried about Saizen REIT at all. We just have to remember that value is what we get and price is what we pay. ;)

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