TSX:FCR.UN - Post by User
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retiredcfon Jul 03, 2023 9:25am
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Post# 35524670
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Another View Can I get your thoughts on FCR.UN at its current price and can you comment on the managment’s strategy to divest off parts of its portfolio. How much do you think the recent sell off is stock specific vs sector? In general, when would you expect REITs to come back into favour?
FCR continues to have high occupancy and net operating income rose 4% in Q1. It is buying back stock and we think the divestitures make sense to clean up the portfolio. Valuation is low at 11X cash flow. Payout ratio is high, but drops to 91% if we exclude costs from its recent fight with activist shareholders. There is not a lot of growth here, but we think at least 60% of the decline is just sector related. It has traded badly for two weeks, but on no new news. On the sector, we expect better things when rates peak, likely later this year. Commercial real estate vacancies remain very high though and that sub-sector will likely stay weak. (5iResearch)