RE:Audited NAV/UAgreed. These analyst reports are next to useless. Their price targets simply seem to follow where the share price has reached. The only reason they are covering this company is due to the banking business on the equity underwriting side (take a look at the syndicate from the December deal) and possibly a debt relationship. This is primarily a retail stock so nobody on the insitutional side is even watching this stock, given the lack of liquidity. Hence those analyst reports are relatively inconsequential. The factors that have helped SGR and are barely mentioned by the sell side include:
(1) disposing weak assets at good prices and acquiring assets at relative bargain prices, when judged by cap rate.
(2) lowered cost of debt and refinancing prior to rates starting to tick up
(3) differentiation in terms of collections during the pandemic versus the peer group
(4) balance sheet stability thru 2020 allowed distribution to be maintained and, more recently, additional asset purchase to be completed in Feb 2021.
The key to growing, given the typical debt/equity maximums, is to execute on the base business, driving up the share price close to NAV. By issuing equity at or above NAV, and tying it to an asset purchase, additional low cost debt can be issued, ensuring that lending covenants around debt/equity are met. If the share price languishes, the equity cost of capital is very high, and unless the asset purchase is really cheap, issuing equity paper is value destructive for shareholders. This is a real problem for a lot of REITs out there today, as many still trade below NAV. You can't just keep issuing debt without some additional equity.
SGR's dividend yield is at such a premium to the REIT sector (and well above UTES), such that rates ticking up shouldn't dissuade investors too much, as the spread above bonds remains enormous. Furthermore, continued execution by the team at SGR willl ensure that the market remains open for them, with additional acquisitions allowing a path towards higher distributions over time, and a share price at or above a climbing NAV.
Good luck...