Monday, May 18, 2015

[SGX Portfolio] Looking at Croesus, My First Love

The very first stock that I ever bought in my entire life was Croesus Retail Trust back in March of 2014. I was a newbie (I still am, but I'm not so mega noob anymore), but I had done lots of research and had looked at a lot of counters. Croesus looked to me to be the best pick of them all.


Since then and now, I have had capital appreciation from $0.875 to the current price of $0.935. I have also collected $0.079 worth of dividends from each share that I own.

That represents very modest gains of 7% capital appreciation and 9% dividends, giving me a total return of 16% over the past 13 months. I think that is very respectable returns.

Strangely though, when I had bought CRT back then, it was trading at a 5% discount to it's book value. Today it trades at a premium of 16%. However, yields are still on the high end, coming in at around 8%.

Of course, the reason for the drop in NAV is caused by the Japanese currency fluctuation (manipulation?) since it has moved massively against the SGD from 60 to 90 over the past 3 years. That's like the SGD appreciating against the JPY by 15% a year. Like I said before, when the Yen goes to 100, I'm booking a holiday to Japan!

Regarding REITs, I think the main metric is P/NAV. There are other metrics that are useful, but I think this is the most important one with regards to REITs valuation. One of the few things that totally screws with my brains when it comes to looking at REITs is when REITs are selling at a premium over NAV and have a yield higher than average, or when REITs are selling at a discount to NAV but still have yields lower than average.

Viva Industrial Trust and Croesus CRT are 2 good examples of the first scenario, pumping out yields of 9% and 8% respectively while being priced over NAV. Suntec and Far East Hospitality are 2 good examples of the second scenario, pumping out yields barely over 5% while selling at a discount to NAV. This discrepancy is of course caused by other factors, but I have to admit that my methodology of finding out why has not been refined yet. I have a few theories though, but I need a lot more time to test them out.

Currently, I am very happy just sitting down and collecting decent amount of rent while experiencing modest capital gains.

Oh, how I wish all my investments was like this baby.

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