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I bought more units of AIMS AMP Capital Industrial REIT today at 93.5c.
Price touched a low of 93c on relatively high volume today. In the following days, if selling pressure does not let up, we could see the next support at 92c tested. That would bring us back to price levels not seen since December 2009.
Although the MFI and Stochastics both suggest that the REIT is terribly oversold, in very bearish circumstances, price could continue to drift lower with momentum oscillators remaining in their oversold territories.
If price should go lower to test 92c, I would like to see the MACD forming a higher low. This would hint that downside momentum has weakened. It would also give us a positive divergence.
The redevelopment of 20 Gul Way is NPI yield accretive and because it is funded fully by debt, it is also DPU accretive. It is estimated that contributions from the redevelopment will start from 1Q 2013.
By early 2014 when both phases of the redevelopment are generating revenue, the management expects a positive DPU impact of +1.465c, everything remaining equal. This would mean a pro forma DPU of 11.465c or a distribution yield of 12.26% based on today's closing price of 93.5c per unit.
We could see continuing weakness in the REIT's unit price if sentiments remain bearish. I would capitalise on further weakness to accumulate as I could find nothing wrong with the REIT's fundamentals.
See slides presentation regarding progress in the redevelopment of 20 Gul Way: click here.
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34 comments:
I knew AIM's price today would surely catch your attention AK :)
Queued myself at 93c but missed out. Will be keeping an eye out tomorrow.
Clueless Punter
Hi Clueless Punter,
I am an open book, am I not? ;)
I have put in my buy order for tomorrow. Good luck to us both. :)
Hi Ak71,
Good explanation about AIMS for tonight. :)
Wahaha, sounds like all of us are predators chasing after the same $0.92. :D :D
Almost all stock weak now except the Telcos.
Funny how people perceive the Telco industry wont get hit if economy slows.
Hope the bears retreat soon and bulls reign!
Huat ah!
Hi INVS 2.0,
Chasing sounds tiring. I am a lazy guy. I prefer waiting. ;p
Hi Ray,
I guess Telcos are what people call defensive stocks.
Defensive stock are stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market.
(Source: Wikipedia)
If Mr. Market should go into a depression, roll out the warchests. :D
Hi AK,
Can you make a guess what is pulling the down AIMS price? From the TA (not very gd in it), my guess is, it will not recover anytime soon based on the MACD as the trend seem strong enough to keep it tt way.
On the other hand, another 2 reits I have been aiming, Sabana and First Reit, die die refuse to come come further, trending sideway.
This put me in a dilemma as to increase my holding in AIMS (only counter vested) or to wait further for the other 2 reits to moderate.
Any advises will be greatly appreciated. :D
Hi EG,
People sell stocks for various reasons but I would sell if I need money or if I no longer believe in the stocks's fundamentals.
Since the REIT's fundamentals are good, I guess people could be selling because they need money.
With a thinly traded counter like this, we just need one big investor to sell to push the price down a few notches. It might not be a reflection of general market sentiments at all.
As for whether you should buy more AA REIT now or wait to load up on First REIT and Sabana REIT, it is your call. I am not going there. Hahaha.. ;)
how did you find out goldman was dumping? your broker?
Hi Anonymous,
I broke up my buy order and bought at different times of the day. Each time, the counterparty was Goldman.
Could you include your initials or name in future comments? Thanks. :)
Hi Ak71,
You use a lot of indicators. My style is only to include the MA lines, volume, and resistance/support depending on the market sentiment. Added fundamental analysis on the company's finance as a whole. Hmm, am I doing the right thing?
Hi INVS 2.0,
Like in Chinese Kung Fu, there are so many sects out there for TA too. ;p
I read somewhere before that there was someone who actually used only trendlines and nothing else!
Do what you are comfortable with. If it works for you, it is good. :)
I 1/3 of my AIM's holdings through POEMS a few weeks ago with the intention to buy in more when it was 95c and below. Yesterday I tried to buy some using Standard Chartered but the platform does not trade AIMs! Wrote in and got a call from them confirming that AIMS trading is not available with no reason available! Anyone has ever encountered such incidents with any of your brokerages?
Hi jtcs,
That is somewhat high handed. News to me. Let's see if any readers have the same experience as you. :)
Do you mind to share your view on Singtel?
I'm getting exhausted in accumulating S-Reits as I earn Ringgit Malaysia.
Bought AIM & Sabana this month. Target to buy more AIM, Sabana and Suntec.
Hi Marco,
Singtel is a defensive stock. I don't really have an opinion here.
You might want to visit Drizzt's blog, Investment Moats. He has blogged about Telcos extensively. :)
Believe Marco does visit my blog, so he would like to hear your second opinion haha.
Hi Drizzt,
Ah, I see. However, Telcos are not within my circle of competence even though I have been a shareholder of Singtel for almost 20 years. ;p
In the last crisis, I bought some Singtel shares at $1.80+ but unfortunately, I sold them away too quickly.
Anyway, I will pass on commenting on something I am not familiar with. :)
Hi Drizzt,
Maybe you can comment. I have not visited your blog until AK71 mentioned it.
Compared to MAXIS (PE:17times) and DIGI (PE:19times), Singtel (PE:13times) is relatively cheap, on top of that, Singtel has regional exposore where DIGI and MAXIS are only covering the domestic market.
Hi Marco,
Thanks for letting me know. I will now have to send Drizzt an invoice for a referral fee. ;p
Drizzt is the only blogger I know who blogs frequently on Telcos. So, go ahead and pick his brains. ;)
Hi jtcs,
AIMS is avail on scb platform, but it is a little weird because you can't add to your watchlist and you can't search for it by name as well. But it will pop up if you go buy and enter the counter code. Its like a game cheat code... Haha
AIMS AMP capital REIT is definitely on SCB. Dunoe how the customer svc pple can tell jtcs otherwise. Badly trained staff.
Code is O5RU.
http://www.bloomberg.com/news/2011-12-15/bank-of-america-goldman-sachs-barclays-default-ratings-reduced-by-fitch.html
Maybe it was the vampire squid itself afterall that was dumping and not on behalf of a client.
Hi JT,
You're right! I just placed a buy order using your "cheat code" and it worked. Thanks alot.
What I find ridiculous is that when I emailed Stanchart (SCB) about the unavailable stock, their online trading rep called me back and said some stocks such as AIMs are not available and they don't know why! "It's a higher departmental blah blah..."
SCB has a really clunky online trading platform. Another problem was the nil-paid rights for Lippo which I bought and exercised did not show up in my portfolio for over a week after the units were supposed to be credited into unitholders accounts. Only after I emailed them and did they reply that it will be credited into my account the next day! Guess it's a compromise I have to pay for using a low commission brokerage.
Anyway for anyone using SCB's online trading, do exercise due diligence!
Hi KTVS,
Thanks for the link.
Yes, if sellers need money, they will sell at any price. As buyers, as long as the stock still looks good, these are the times when we feed. :)
Hi AK,
About the goldman counterparty thing. How do you have access to such info?
Is it through the broker like peoms of kim eng etc and is it something that has to be paid for? I'm curious and also want to find out these things.
Thanks.
Jim
Hi Jim,
The information should be available free from the online trading platform you use.
For Lim&Tan, go to "Trade" and click on "Details" of the transaction you want to see.
Check with your broker to see how to access the information on the trading platform you are using. :)
Hi Marco, sorry i tot i mistaken u for someone with the same nick on my blog!
anyways i tend to use EV/EBITDA to take a look at telcos as they do have debts (yet safe) and payout through free cash flow.
if you could post the numbers we could probably evaluate better.
singtel is regional, but it could work for or against them. compare against starhub, singtel have a lower return on asset compare to starhub.
lets just say that starhub by staying in their comfort zone return a much higher return on dividend/investment/asset to their share holder. Singtel on the other hand chose to invest in optus which have a ROA of only 5%, telkomsel 15%, Bharti 10% and AIS 20%. but their singapore ROA beats all these investment sans AIS by wide margin. had singtel say in singapore they would have a higher return for their share holders.
my friend invested in Telkom Malaysia and it had been a splendid investment! what is your take on that?
Hi Drizzt,
Thanks for replying to Marco here. :)
Hi Marco,
You might want to take this offline and exchange email addresses with Drizzt.
Usually, I would like to have more comments here. However, I will be going away this Sunday for almost two weeks and might not check my blog for comments. So, if you guys leave comments here, you might not see them until end of the year. ;p
Hi AK,
I use the poems platform but never could find where such info could be found.
Not critical to know but just interesting.
Thanks.
Jim
Hi Jim,
Yes, not critical information. Just fun to know. :)
I also did not know where to find the information initially but a call to my broker solved the mystery. ;p
Hi Drizzt,
Thanks for the reply.
Telekom is not in my watch list, because I will always avoid in investing in government link company (GLC) in Malaysia.
Hi AK, are you aware that the manager of AIMS had sold its unit holdings in Oct to fund payment of distributions to unitholders. However, I believe regular distributions are typically obtained from rental income. Hence, I'm surprised by this move as it sounds like the REIT does not have sufficient cash to pay out regular distributions to unitholders. What do you think?
Hi Wanderer,
At least two other readers have asked me this question, iirc. The manager sold units it owned to pay dividends to its shareholders (i.e. the shareholders of the manager which are AIMS and AMP Capital). It has nothing to do with unitholders of the REIT.
I don't think any REIT manager would be so altruistic as to sell units they own (which are actually paid to them as management fees in many cases) only to give the proceeds back to unitholders. ;)
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