Inovalis Real Estate Investment Trust T.INO.UN

RE:I broke it down here’s what think

[flamingogold]

Appreciate the analysis. One needs to factor in sentiment and that is currently negative not to mention markets have had a good bounce off the June lows (S&P is up 18%). So, I wouldn't be surprised to see some market weakness this Fall and those are headwinds that will pressure even the most positive stocks.

Under $5 is good to start tapering in. And, I would say that any price that gives us a double digit yield here or higher (ie. share price in the low $4's) is definitely a strong buy and provides a lot of cushion for the unknowns ahead.

Bestarboss wrote:

I've decided  to add to my postion after a 45% haircut ( 30% of that in the last 3 days alone ) can it fall more ? Sure it can , Where's bottom ? who knows that's a fools game but I'm comfortable here 

 

Here are the Main reasons why I added to my position and which also explains the fall from grace from 2018 2019 glory days of innovalis ; 

 

- recovering Hangover from some missed or reduced rents due to covid (that special divident after the sales of a few properties a year ago was unnecessary and could offered a little more of a cushion right now but can't cry over spilled milk right theirs certain things below that mangmwnt did not see coming 20\20 hindsight is always perfect right ) 

 

 - 3 vacant properties missing on about 1.6mill in revenues per quarter plus 1.5 mill in penalties per quarter for kicking tenents out earlier then lease expiry day these propresties have  to be vacant due because it's part of their asset recycle plan one out of the 3 is getting sold and they Will get 33-36 mill in cash by the end of 2022 was supposed to happen sooner anyhow this is a ( temporary issue )

 

-Negative Currency impact : euro is at 22 year low which impacted them about 655k this quarter after hedges ( temporary issue... futur hedges will fix this ) 

 

-uptick in spending capex for renovations as part of the asset recycle plan ( this is a temporary and they will be able to raise rents and hopefully have an even better retention rate )

-low intrest rates on their mortgages under 2% hard to find these rate here in North America plus where else will you find nice exposure to European real estate here on the tsx most of them have all Been sold ( anyone remember dream global )

 

- given all these temporary issues Nav still over 9 and about 50% from current share price And honestly Nav dipped a touch only because of impairment they had to take due to vacant properties again temporary and can be reversed other reason due to euro getting crushed again temporary 

 

Conclusion ; in 3-4 quarter's from now they can once these issues stated above are corrected they can increase affo by atleast 2 million per quarter conservatively that will be and uptick of 2 million from the  4.5 million in Affo currently so say 6.5 mill per quarter in affo in a 8 months to a year from now  

 

6.5 million  in affo - new dividend of about 3.25 per quarter payout ratio will drop to 50% -60% range they will have room to re start increasing divident back to atleast  5 million giving them a payout ratio of about 85% and if they decide to bring it  back to 6 million that would leave them a payout ratio of about 93% like back in their glory days of 2017-2019 pre pandemic.   If they take on more properties  and grow well it's all gravy form there . 

This is my personal opinion and not investment advise remember to diversify your portfolios and always do your research best of luck to all hope  this helps and gives a better idea to those scratching their heads on what exactly is going on . Sell buy add hold all according to your own time horizons and risk tolerances .

Best of luck to all !