Post by
valueinvestor89 on May 10, 2022 4:59pm
Stock buy backs and expected NAV by Q1.2022
H&R has purchased 12.7m shares year to date including the 3m shares they purchased in April which they announced today at under $13/share. I expect this 4 months of NCIB will add 25-30 cents to NAV.
Since they have a 55% affo distribution ratio I expect another 10-13 cents added to NAV from retained earnings.
Most importantly it will be interesting to see the nav increase driven by fair market value adjustment through external appraisals, considering where the multifamily and industrial cap rates are transacting today vs. their reported value i expect at least $2 per share increase on FMV gains this quarter.
These three combined could easily mean a $20 reported nav on their financials on thursday. That will be a 70% premium from where they are traded today. Management could use this big discreptancy in nav vs. trading price to further accelerate their NCIB program by purchasing large blocks rather than the 170k daily units maximum. It will be a very interesting quarter to watch out for.
Comment by
CatchTheDip on May 10, 2022 5:31pm
Im looking for $18.50 to $19.00 NAV based on a 10% jump in Residential and Industrial valuations, Retained earnings, and 13-15 cent gain from buybacks. $20 is not realistic unless you expect a 20-30% jump in Residential and Industrial valuations. That would be impressive, but unlikely. Even at $17.70, HR is stupidly cheap here for the quality, and SPNOI growth.
Comment by
SNAKEYBOY on May 10, 2022 6:48pm
Well, Artis is doing a NCIB and bought Cominar properties with a instant $1.30 FM gain and market tanked it to $11.xx. Such bearish sentiment in REITS that I dont think any reit can do much.
Comment by
CatchTheDip on May 10, 2022 7:09pm
AX needs to prove that NAV gain. The appraisals/estimates by Cominar said it was a fair sale. I believe AX can deliver gains to prove that NAV, but it will take time, and until stuff sells, it will be a question mark on those gains. This is why AX didn't go up. Additionally, their SPNOI dropped, which is expected to reverse to neutral this year.
Comment by
valueinvestor89 on May 10, 2022 8:59pm
You might be right but the I felt like the early warning on FMV increases would have to be substantial to announce it (I.E bigger than 25 bps decrease) I was using a 50bps compression on multi family and industrial which I think can be easily justified based on recent transactions. But let's see how this shapes up on Thursday but I agree even at 18 is a steal