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

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

[Shirtlessnomore]

Just take into consideration what is going on in the world right now, this is not happening during just any "normal" year, everything has been upside down, is it going to go back to normal? Of course it is but every single reit has done some form of accounting changes to accommodate for all of this, for example writing down properties in their portfolio is a classic move done many times in the past by companies who know full well their financials arent going to be great so why not pile the bad news as high as possible so everything gets out at once, that way going forward everything looks much better, MRT.UN is not the only reit currently using this strategy, quite frankly they would have had success here doing that this quarter but they cut the dividend which triggered a sell off, again not a terrible move NOW going forward there are potentially even more catalysts to raise the s.p. No matter how you care to look at it the stock is too cheap. 80 cents above the all time low is completely and utterly ridiculous especially considering very soon we return to some normalcy, this will go up, the reward far outweighs the risk here. This is a perfect example of "damn I wish I bought that" or more of it. Blood in the streets means BUY! It's worked many times in the past for me and it will work again in this. PRV.UN is great, I've owned it several times if you are looking for a 20% gain then buy it up, I'm looking for a little more.

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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