Croesus Retail Trust: The EDGE.

A reader kindly informed me that the latest issue of The EDGE has a write up on Croesus Retail Trust. The Trust is, of course, my latest investment and one of only two stocks I have bought in the last three months. So, what has The EDGE got to say?

"... amid the improved sentiments as Abenomics works its way through the world's third biggest economy, one counter considered to be the best proxy in Singapore to Japan seems to have gone unnoticed amongst investors."

1. The Trust's current distribution yield is amongst the best in the world of business trusts and REITs in Singapore and Japan. Current unit price: 87.5c.

2. Business trusts have not been well received in Singapore for various reasons, including their heavy use of debt and less predictable payout.

3. Books revenue in JPY but pays investors in S$.

4. Expects to charge higher rents from this year and the Trust plans to replace more than half of expiring leases with bigger brands.

Some other points were also made but, to be fair to the publication, you might want to get yourself a copy of The EDGE. Article is on page 16. The price went up recently: $5.00 a copy now.

If you want to find out more about Croesus Retail Trust right now, I have been blogging about the Trust lately. Just search for the articles in my blog. Free of charge. Wink, wink.

Actually, I believe that the current malaise in the Trust's unit price has also partly got to do with the fact that the initial euphoria we saw at the Trust's IPO and the eventual bursting of that bubble hurt many retail investors. I know some who were caught. Once bitten, twice shy or so the saying goes.

Well, I rather like to look at out of favour stocks with very attractive attributes for income investors (perhaps, with a dash of growth potential) and Croesus Retail Trust seems to fit the bill.

Related posts:
1. Croesus Retail Trust: What is my plan?
2. Croesus Retail Trust: Initiated long at 87c.
3. Croesus Retail Trust and Saizen REIT.

Croesus Retail Trust: What is my plan?

When I revealed that I had a BUY order queued at 85.5c, a reader was concerned. He said that he bought some units in Croesus Retail Trust at 87c because he read my blogs and how I first initiated a long position at 87c too.

From Winston Koh's FB wall.

Do I think that the unit price will fall a bit more?

Well, I don't know. My bowling ball has been rather quiet lately. Not talking to me. Maybe, I should give it a good rub later but that sounds like work and I am such a lazy guy. Bad AK! Bad AK!

What I do know is that selling pressure seems to have eased, looking at the higher lows in the CMF and the MFI.

Click to enlarge.

The moving averages are all bunching up which implies a very low level of volatility and this congestion in the moving averages will serve to be an important support or resistance in future. In future?

Yes, with the Bollinger Bands having narrowed, I would not be surprised if this period of low volatility should be followed by a big move in unit price in the near future.

Big move? Up or down? Well, if I should hazard a guess, with the CMF and MFI the way they are, I would say "up". However, if these should be negated and if unit price were to move down instead, using Fibo retracement lines, the 138.2% golden ratio is at 85.5c.

So, this solves the mystery of why AK71 has put in a BUY order at 85.5c. For those who say they feel safer if they buy at a lower price than me, well, 85c is a possibility too since that is where we find the 161.8% golden ratio.

At 85c or 85.5c, we are looking at a prospective 9.62 to 9.68% in distribution yield, according to guidance provided by the management. It would also mean getting in with a bigger discount to the Trust's NAV.

There is no way I can predict the price movement. However, I do know what I would do in each scenario.

Asking what would we do is more useful than asking what would the price do. 

After all, we have control of our faculties (I hope) but we do not have any control over Mr. Market's actions.

Some numbers (pre-MTN):

From: Presentation to investors (7 & 8 Jan 2014).

Related posts:
1. Croesus Retail Trust: Overnight BUY order filled. (I looked at how the S$100 million MTN could affect the Trust here.)
2. Why some were burnt badly.