Cache Logistics Trust: Low gearing.

I have only mentioned Cache Logistics Trust (CLT) once before in my blog and it was in relation to AIMS AMP Capital Industrial REIT (AA REIT) in a blog post "Create more passive income with limited capital" on 29 May.

Anyone who has been following my blog would know that I like REITs with low gearing. On 29 May, I mentioned that AA REIT had the lowest gearing amongst industrial properties S-REITs next to the new kid on the block, CLT.  Of course, CLT is no longer the new kid on the block but its gearing level remains the lowest amongst industrial properties S-REITs.

In its report on 29 July, CLT's gearing level was at 25.5%.  DPU was 1.71c for the quarter (annualised = 6.84c).  NAV (excluding income for distribution) was 87c per unit. Interest cover ratio was 9.3x which is even higher than MLT's and this is definitely a positive.  See slides here.

On 29 July, CLT was trading at $1.01 per share. This would give a yield of 6.77% based on an annualised DPU of 6.84c. Its unit price is now 98.5c, not much lower. That's unattractive for me although I recognise that it is a relatively safe investment.

Price hit a low of 91.5c in late May which is still well above its IPO price of 88c per unit.  The price decline to late May showed classic signs of a low volume pullback and anyone who picked up some then got a fair deal.

Recent trading volume has been thin although the impending income distribution scheduled for later in November could give its unit price a nudge upwards.  Technically, the MACD has formed lower highs and lower lows while the 20dMA has gone flat after completing a dead cross with the rising 100dMA.  The 50dMA is still declining and seems set on forming a dead cross with the rising 100dMA.  All bearish signs although with volume so thin, we would be right to question the reliability of the charts.

CLT would be announcing its results on 28 October. Let's see how things go.

Related post:
Office S-REITs VS Industrial S-REITs.

Golden Agri, Kencana Agri and IndoAgri.

Crude Palm Oil has crossed the RM3,000 mark today. The long term resistance at around RM 2,780 which was taken out days ago is most probably the new support now.  The fortunes of CPO counters should continue to improve.

If not for its problems with the environmentalists, I expect Golden Agriculture to be a big beneficiary to strengthening CPO price.  If it loses more customers like it did in the past, it might not be able to ride on the improving CPO price firmly like the rest.  Technically, Golden Agriculture is correcting from overbought conditions.  It should see support at 61c and that would be a safer entry price.

A friend sent me an email a couple of weeks ago, maybe more, which he received from his broker. His broker recommended a buy on Kencana Agriculture which is much smaller than Golden Agriculture in many ways. Looking at the charts now, I am wary of this counter because it seems to display classic signs of negative divergence between price and volume, price and MACD, price and MFI as well as price and RSI.  The shorter term 20dMA seems to be flattening.  Could this loss of momentum suggest something more ominous?

IndoAgri has clear signs of being overbought.  $2.44 is the top of a double bottom like formation and it is also where the 20dMA is approximating soon. When we look at the Fibo lines, it is also the 138.2% line. It is the support to watch in case of a retreat in price. A fair entry price? It could be but it does not mean that price could not retreat further.  The longer term uptrend support is where the 100dMA is approximating.  This is currently about $2.31.

My very first post on Golden Agriculture:
Why Golden Agriculture?