Our Top Stock for 2007
Posted on Wednesday, January 3, 2007
Disclaimer: This article should not be viewed as a ’stock recommendation’, but only as open sharing with our viewers what stock we have recently added to our own portfolio. Our portfolio goals may be far different from your personal finance goals. This article should only be used for information, or as a starting point for your further research. You may want to consult other sources for additional information or insights before making any investment decision.
FirstREIT is our top stock choice for 2007. FirstREIT is a Real Estate Investment Trust, which was recently listed on the SGX with an initial portfolio of four properties in Indonesia, including three hospitals. Obviously, FirstREIT is a healthcare-focused REIT.
FirstREIT approximate facts & figures
* IPO offer price: S$0.71
* WallStraits purchase price: S$0.72 to S$0.73
* Forecase 2007 dividend: S$0.065 (about 9% at our cost)
* PE (2007) = 73 / 6.5 = 11
* NAV (initial 4 properties) = S$0.97
What is so interesting to WallStraits about FirstREIT?
It appears that healthcare is a growing industry in the Asia-Pacific region, and FirstREIT has a strategy of acquiring hospitals, nursing homes, and other healthcare-related assets in the region. It is currently in negotiations to acquire a couple nursing homes in Singapore. FirstREIT had zero gearing at time of IPO, so it can borrow quite a bit of money to make acquisitions before it will need to issue any new shares to fund such acquisitions. Finally, FirstREIT seems to be a laggard of the REIT sector for reasons that are difficult for us to understand… but easy for us to take advantage of. As we have always said (contrarians that we are)… take what the market offers.
After a strong market run-up in recent years, especially during 2006, we naturally become increasingly cautious, conservative and safety-focused. FirstREIT offers us an attractive proposition… an expectation of stable income from a portfolio of healthcare-focused properties, expected steady growth through the acquisition of additional yield-acretive properties over the coming years, and a relatively low current valuation (high dividend yield) compared to other REITs listed on the SGX (or any other global market for that matter).
There have been several discussion string addressing the pros and cons of FirstREIT (and other REITS) on the WallStraits forum. If you wish to learn more, share views, and hear other comments and insights… feel free to join in our forum discussions… it’s free!
Wishing you all a very happy and prosperous new year!
Sage@wallstraits.com
Disclaimer: This article should not be viewed as a ’stock recommendation’, but only as open sharing with our viewers what stock we have recently added to our own portfolio. Our portfolio goals may be far different from your personal finance goals. This article should only be used for information, or as a starting point for your further research. You may want to consult other sources for additional information or insights before making any investment decision.
FirstREIT is our top stock choice for 2007. FirstREIT is a Real Estate Investment Trust, which was recently listed on the SGX with an initial portfolio of four properties in Indonesia, including three hospitals. Obviously, FirstREIT is a healthcare-focused REIT.
FirstREIT approximate facts & figures
* IPO offer price: S$0.71
* WallStraits purchase price: S$0.72 to S$0.73
* Forecase 2007 dividend: S$0.065 (about 9% at our cost)
* PE (2007) = 73 / 6.5 = 11
* NAV (initial 4 properties) = S$0.97
What is so interesting to WallStraits about FirstREIT?
It appears that healthcare is a growing industry in the Asia-Pacific region, and FirstREIT has a strategy of acquiring hospitals, nursing homes, and other healthcare-related assets in the region. It is currently in negotiations to acquire a couple nursing homes in Singapore. FirstREIT had zero gearing at time of IPO, so it can borrow quite a bit of money to make acquisitions before it will need to issue any new shares to fund such acquisitions. Finally, FirstREIT seems to be a laggard of the REIT sector for reasons that are difficult for us to understand… but easy for us to take advantage of. As we have always said (contrarians that we are)… take what the market offers.
After a strong market run-up in recent years, especially during 2006, we naturally become increasingly cautious, conservative and safety-focused. FirstREIT offers us an attractive proposition… an expectation of stable income from a portfolio of healthcare-focused properties, expected steady growth through the acquisition of additional yield-acretive properties over the coming years, and a relatively low current valuation (high dividend yield) compared to other REITs listed on the SGX (or any other global market for that matter).
There have been several discussion string addressing the pros and cons of FirstREIT (and other REITS) on the WallStraits forum. If you wish to learn more, share views, and hear other comments and insights… feel free to join in our forum discussions… it’s free!
Wishing you all a very happy and prosperous new year!
Sage@wallstraits.com
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