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I like First REIT and it is a large investment in my portfolio. Although, fundamentally, I think 72.5c/unit is a fairly attractive price, technically, it looks rather weak. This is why I have not added to my long position in the REIT in the current environment.
Technically, the REIT tested resistance at 72.5c in the last session on the back of low volume. If it did manage to break immediate resistance, it would meet with resistance at 73.5c and 74c. If volume stays tepid, chances of resistance at 72.5c being overcome are rather low. Of the 450 lots which changed hands in the last session, 321 lots were sold down at 72c.
The downside proposition looks stronger. The rising 200dMA should provide stronger support at 70c which is a psychologically important round number. I would probably add to my position closer to this level. Having said this, I might be seeing the beginnings of positive divergences on the daily chart and we could see price rebounding quite smartly if they are valid.
Referring to the weekly chart, it is quite obvious that the uptrend is intact and this, to me, means that any short term weakness is an opportunity to accumulate on the cheap.
Related post:
First REIT: Is the bear just resting?
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11 comments:
Hi AK71
First Reit is the top holding in my portfolio. At current price, it has a yield of 8.8%. But what made this most attractive is the low gearing of 14.2% (after sale of Adam Rd hospital to pay down the loan). I'm looking forward to their future acquisitions that will boost the DPU even more. And hopefully these are debt-funded so there should be no dilution from private placement or additional capital required from rights.
I've considered adding on to my position but decided not to due to a high concentration risk of my portfolio. Also concerned about the earthquake risk in Indonesia, esp. seeing what Japan has gone thru.
Cheers,
Busta
btw I'm Busta if I forgot to leave my name for the post just now. :)
Hi Busta,
Thanks for the comments. You did include your name in the first post. ;)
I am slowly increasing my investment in First REIT and hopefully will bring it up to be on par with my investment in AIMS AMP Capital Industrial REIT. I like it very much for the same reasons as you.
First REIT is currently the third largest investment in my portfolio, overtaking LMIR after its rights issue not too long ago.
I am also looking to increasing my investment in Cache Logistics Trust in time now that I have initiated a position in it. :)
how come first sold adam cancer center after dumping $ to da reno...
tot adam could contributing to first results..
Hi WK,
I believe First REIT made money selling the Adam Road facility. Not a bad move if they are able to put the money to better use in future.
Of course, if this bothers us sufficiently, we could write in and query the management. ;)
Hi ak, busta brought up a good point. Are you familiar if any sites in Indonesias first REIT are exposed to quakes? If not we cab Rule out the risk
Hi Anonymous,
I am afraid I cannot give you an answer. I would have to be a geologist or seismologist to be able to answer that one.
Perhaps, the best people to answer the question would be the management. Send them an email? ;)
Could you include your name or initials in future comments? Thanks.
i think theres some write up from investmentmoat on this quake thing. cant remember the details...
Hi WK,
I do believe you are right. I remember that Drizzt wrote in and queried the management on a few issues and he was impressed by their response.
To: Anonymous,
You might want to visit Investment Moats: http://www.investmentmoats.com/
i believe it is this article >> http://www.investmentmoats.com/stock-market-commentary/value-investing/first-reit-hedging-inflation-and-geographical-risks/
Hi Drizzt,
Thank you very much. Much appreciated. :-)
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