Perennial Real Estate Holdings' stock price spikes.

Regular readers know I have smallish investments in a few property developers and in a blog in late 2019, I said:

"Based on market value, together, they probably account for a sizable chunk of my investment portfolio."

Yesterday, I saw PREH's stock price spiked up and looked for an explanation.

I got this:

"Perennial Real Estate Holdings Limited (the "Company") notes the increase in the price of the shares of the Company on Singapore Exchange Securities Trading Limited in the course of trading today.

"The board of the Company (the “Board”) has been notified that certain of its substantial shareholders are reviewing the options in relation to their holdings in the Company.

"The Company understands that a decision has yet to be made by such substantial shareholders and there is no assurance that a transaction will take place.

"Accordingly, shareholders are advised to refrain from taking any action in respect of theirshares in the Company which may be prejudicial to their interests, and to exercise caution when dealing in the shares of the Company. The Company will update shareholders in due course when it becomes aware of any material developments."

Source:
PREH Voluntary Announcement.





I have added to my smallish investment in PREH in the past, averaging down my cost.

Still, this investment is suffering a paper loss.

With the spike in the stock price, the paper loss has significantly reduced.

I do not intend to add to my investments in property developers as I explained late last year.

"For a retiree like me, I feel that is enough exposure to property developers.

"For sure, I do not know when value would be unlocked and this unknown makes limiting the total investment exposure to 10% of my portfolio or lower sensible."

I also said:

"... the ability to generate a meaningful recurring income stream has always been an important consideration for me.

"It has become more so as I grow more settled into my early retirement."






If there is going to be an offer to take PREH private, I hope it is a fairly good price as PREH is trading at a huge discount to NAV.

To be realistic, I could still end up losing some money here.

Who wants to pay a higher price if they can pay a lower price?

Even though PREH is undervalued, if we are buying on the hope that value will be unlocked, it is more speculation than investment.

In speculation, being lucky is probably more important than being clever.






Related post:
AK's exposure to property developers.