Morguard Real Estate Investment 5 25 convertible unsecured subordinated debentures T.MRT.DB.A

RE:RE:RE:RE:RE:FMV of MRT.UN properties

[Shirtlessnomore]

Just to back this up, November 26th 2020 PRV.UN hit 5.97, closed yesterday at 5.04 so almost 4 months of diddly squat. PRV.UN had a low of around 2.60 during this, the gravy has been made. I had some, it was delicious.

Shirtlessnomore wrote: I should also add that PRV.UN is a completely different reit who invests in gas stations fast food and strip plazas all of which have remained open, that's why they recovered so fast, the dividend was cut as well and remains at the cut level, PRV.UN has done nothing since it hit 6 bucks, I know because I sold it and watch it daily, 6.00 -6.15 for weeks maybe months now.

wheeloffortune wrote: Why would they throw it in the dumpster?  Because they are loosing $5.75 a share.  PRV.un is actually making 45 cents a share, not loosing $5.75 a share.  I doubt you're going to keep collecting 5% when it's loosing $5.75 a share.  It's horribly mismanaged.  BTW- Partners REIT also had a majority stake owned by insiders--it didn't change a damn thing: they screwed over the minority and delisted.  A class action was filed and the minority holders didn't get their money back because of mismanagement.


quote=Shirtlessnomore]Yes I am saying it cant happen here! MRC has a JURRASIC stake here, the same will not happen. Why would MRC allow properties to be sold at a huge discount and throw all their years of accumulation in the dumpster? Simple answer is it's not going to happen, even at the "huge discount" you speak of the stock is still undervalued. They have enormous equity no matter how you look at it, throw it away because of the flu? NO CHANCE! I'm not saying this will skyrocket back to 12 bucks by year end but it most certainly wont be 5. This is just too easy from this level. yes there are other reits that are far more "popular" but its ALL real estate in canada, some might recover quicker but they will all recover and I'm more than happy to take a position at 60% off and collect 5%. Jmo.

wheeloffortune wrote: The problem is if I type in TMX MRT.UN, key data says EPS = -5.75.   It is bleeding serious cash.  PRV.UN EPS -=+0.45, DIVY=7.45 and it's an $8 stock trading at $6 (a much better deal).  The mismanagement at MRT.UN hasn't changed for years.  There are so many way better REITs out there that pay a better divy, are still at discount and are not bleeding serious cash due to mismanagement.   Investors who lost money on pre-pandemic mismanaged reits that liquidated like PARTNERS REIT don't want to get burned again.  They were saying the same BS with Partners REIT that FMV was high vs liabilities, but then management sold off the properties at a huge discount (pre-pandemic) screwing over the shareholders with little equity left.  "OH, but it's audited financials with tonnes of equity", you say...  You think the same can't happen here by this bad management group??

15Stanmore wrote: At December 31, 2019 the audited FS of MRT.UN reported a unit holder's equity or $1,537 million and 60,735,539 units issued and outstanding, for a Net FMV per unit of $25.32. Total assets were $2,937 million and liabilities were $1,399 million.

The shares closed on December 31, 2019 at $11.79, a 53% discount to its apparent audited FMV.

At December 31, 2020 the audited FS of MRT.UN reported a unit holder's equity or $1,158 million and 64,125,215 units issued and outstanding, for a Net FMV per unit of $18.05. Total assets were $2,558 million and liabilities were $1,400 million.

The shares closed on December 31, 2019 at $5.39, a 70% discount to its apparent audited FMV.

This would appear to be an unsupportable discount, especially when compared to other Canadian REITs many of whom trade at a modest 5% to 10% discount, and some who trade at a premium (TNT.UN for example, currently trading at an 8% premium).

On the other hand, the earnings generated by the FMV assets appear to be significantly below industry standards. Does this suggest the current FMV calculations of the properties are vastly overstated, even after being written down by $420 million (about 14%) at the end of 2020.

I would normally be interested in buying a security trading at a 70% discount to its fair value, as time should see it revert to something closer to its true value and hence reward a patient investor. I am not sure it applies in this circumstance with its persistent history of oversized discounts to FMV.

Can anyone help?

 

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