Cambridge Industrial Trust: Worth another look.

I was looking at Cambridge Industrial Trust's latest presentation slides. It could be worth another look as its income could bump up quite meaningfully in 2012 and 2013.

Latest numbers:
Gearing: 33.1%
(No refinancing due till 2014.)
NTA/unit: 61.7c
Interest cover ratio: 5.1x
DPU: 1.082c

What I find attractive:
1. Built-To-Suit Project at Tuas View Circuit. Completion by 3Q 2012.
2. Built-To-Suit Project at Seletar Aerospace Park. Completion by 3Q 2013.
3. AEI for 30 Toh Guan Road. Completion by 4Q 2012.
4. AEI for 88 International Road. Completion by 4Q 2013.
5. AEI for 4 & 6 Clementi Loop. Completion by 4Q 2012.
6. Proposed acquisition of 25 Pioneer Crescent.

With gearing level at 33.1%, the Trust has ample debt headroom to finance items 1 to 5 if the management should decide to take on more debt. This would mean greater distribution yield accretion.

Item 6 is to be financed with internal cash resources which means gearing level will not go up and the purchase will be distribution yield accretive, everything else remaining equal.

Buying now at 46c per unit will give a distribution yield of about 9.4%. Even with all the initiatives announced, I would like to see this yield going nearer to 10% before increasing my investment in the Trust.

See presentation slides here.

Capitaland, CapitaMalls Asia and NOL: Closing charts.

CAPITALAND

Volume increased over the last session but the bulls were not strong enough to have the share price close above the 50dMA. Closing at $2.52 is where we find resistance provided by the declining 50dMA.

Although price did touch a high of $2.56, forming a white spinning top suggests indecision and is a sign of weakness.

The counter has, in the meantime, broken out of its immediate downtrend. Immediate support is provided by the flat 20dMA at $2.49.

CAPITAMALLS ASIA

CapitaMalls Asia's chart looks more promising. Another white candle was formed today on higher volume. $1.25 could be resistance turned support.

Further upward movement in price could see the gap at $1.33 filled. Immediate support is at $1.25.

NOL

Although a black candle was formed today on relatively higher volume, there is reason to be optimistic. Why?

The decline in price only travelled halfway down the white candle from the previous day. This suggests that the bears were lacking in conviction and there were enough buyers to keep the share price from falling too much.

A decline to immediate support at $1.125 could see more buying momentum.

CapitaMalls Asia: Watch the 50dMA.

The MACD has formed a higher low together with a higher low in share price last week. Momentum has clearly improved and we could have found a floor here, if not the bottom.

Closing at $1.25 in the last session meant that the resistance provided by the declining 50dMA was still valid. This morning, thus far, price action is flirting with this MA.

Could we see the share price closing above the 50dMA today? If it does, the 50dMA could be resistance turned support and price could go higher to test resistance provided by the declining 100dMA. This could be another good trade.

Capitaland: Positive divergence.

Capitaland spots a positive divergence. As price formed a new low on 4 Oct, it is clear a few sessions later that the MACD has formed a higher low. The MACD is a lagging indicator just like other momentum oscillators. So, things are usually clearer a few sessions later. Acting before a clearer picture forms would be to pre-empt.

That the MACD formed a bullish crossover with the signal line in negative territory also suggests the return of buying interest although not strong enough to send the MACD into positive territory. Coupled with the positive divergence, we could see Capitaland's share price moving higher.

A long white candle was formed in the last session as resistance provided by the 20dMA was overcome convincingly. Share price is currently resisted by the declining 50dMA which is at $2.52. If this were to be broken, I believe bulls will return and bears will cover their shorts.  We could then see the share price rising to test resistance provided by the declining 100dMA which approximates $2.71 which is also a potential double bottom neckline.

Could be quite a rewarding trade for breakout traders if a breakout should materialise.