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Cache Logistics Trust: Low gearing.

Saturday, October 23, 2010

I have only mentioned Cache Logistics Trust (CLT) once before in my blog and it was in relation to AIMS AMP Capital Industrial REIT (AA REIT) in a blog post "Create more passive income with limited capital" on 29 May.

Anyone who has been following my blog would know that I like REITs with low gearing. On 29 May, I mentioned that AA REIT had the lowest gearing amongst industrial properties S-REITs next to the new kid on the block, CLT.  Of course, CLT is no longer the new kid on the block but its gearing level remains the lowest amongst industrial properties S-REITs.

In its report on 29 July, CLT's gearing level was at 25.5%.  DPU was 1.71c for the quarter (annualised = 6.84c).  NAV (excluding income for distribution) was 87c per unit. Interest cover ratio was 9.3x which is even higher than MLT's and this is definitely a positive.  See slides here.

On 29 July, CLT was trading at $1.01 per share. This would give a yield of 6.77% based on an annualised DPU of 6.84c. Its unit price is now 98.5c, not much lower. That's unattractive for me although I recognise that it is a relatively safe investment.

Price hit a low of 91.5c in late May which is still well above its IPO price of 88c per unit.  The price decline to late May showed classic signs of a low volume pullback and anyone who picked up some then got a fair deal.

Recent trading volume has been thin although the impending income distribution scheduled for later in November could give its unit price a nudge upwards.  Technically, the MACD has formed lower highs and lower lows while the 20dMA has gone flat after completing a dead cross with the rising 100dMA.  The 50dMA is still declining and seems set on forming a dead cross with the rising 100dMA.  All bearish signs although with volume so thin, we would be right to question the reliability of the charts.

CLT would be announcing its results on 28 October. Let's see how things go.

Related post:
Office S-REITs VS Industrial S-REITs.


Drizzt said...

vested in this but i thought its gearing would be much higher than that.

perhaps my calculations were wrong.

like any industrial reit is good when economy is doing well not really good when its not so its good to get a leg in when the price is right.


AK71 said...

Hi Drizzt,

I took the gearing number from their 2Q report. I hope they are meticulous in their report. ;)

I am still waiting to see if I could get some at a lower price. Perhaps, if it retests its lows? :)

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