Monday, 26 November 2018

Singapore Dividends for Financial Freedom - First REIT - to be or not to be?


First REIT has taken a battering recently, with its share price bouncing about like drunken town crier. The counter has been on my watch list for sometime, and I've been waiting for the opportunity - and the cash -  to invest more into the counter as a long term play.

Of course, it's been down-graded based on Flinch's assessment of Lippo Karawaci, the main sponsor and tenant of First REITS properties. Now, this move gives First REIT's investors cause for concern, but I think the crazed market sell off has been based on emotion rather than rationality. Also, compounding matters are recent allegations of its corruption case pertaining to the Meikarta Project. But even with this thrown into the mix, I still feel it's been over sold.

For those interested in the stock keep the following in mind: 

1. After the sell-off the REIT is now trading at at 1.0x price to book (previously investors paid a higher premium)
2. The divided is deliciously attractive, standing at over 8%.
3. Gearing is under 35% which gets a thumbs up moving forward. Also, the REIT has a steady record of paying and raising its dividend contribution.

Earlier in the week First REIT's price dropped to 0.94, prompting me to take a rather large bite. Since then, it's been bouncing around and even dropped 4.36% today. As I've said before, this doesn't bother me, for what I'm looking for are long term dividend players. I believe based on the financial numbers and performance of the REIT, combined with its impressive portfolio of health care facilities, it seems people have gone a bit crazy on this one. I think FIRST Reit has a long way to go. Of course, I could be wrong, but that remains to be seen. Until then, I'll continue to collect my dividends and reinvest as I see fit.

Sometimes you can lose more standing on the sidelines.

By the way, do your own research before you invest in any stock. I'm just ranting under the stars.

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FIRE and my Discontents (part 1)