Post by
canadafan on Jun 24, 2010 3:06pm
slow recovery against down market
White Rock REIT is underway with a very slow price reocovery agianst an otherwise down market.
Zeroing in on the past month, there was reasonable support around the $14.80 range.After which they announced a new offering at $14.
We saw what appears to be a bottom of $13.80 , two weeks ago.
From that point to today, there has been a very subtle recovery. I suspect by next week when Q2 is over and numbers always find the way out into the street; ( or analysis of same), you will see much stronger recovery in the price.
Management has sent a clear signal regarding the stability of the distribution.
The peer comparison of REITs, shows an average return of around 7%. With a high of 12% (white rock) and a low of 4.42% ( board walk reit)
Meaning that 7% is in the middle of the sector.
Point is , should the market come to accept WRK as "average" that would translate into a yeild of 7% or a trading price of $23 !!!
Even a modest yeild ( by comparison to the group) of 10%
would bring a price of $16.80 ( which is the range recent analysts have wrk at).
The list can be found at
globeinvestor.com search under stock filter.
Within this list fo Canadian REITS are 18 reits. Only 3 of which have a distribution above 10%
The next highest is 9.5%...so the 10% distribution is quite conservative within this comparison.
When you take the time to understand how reits work and WRK.UN place within the group you will come to realize how much of a no brainer this is.
Buy, hold and wait..might have to wait a long time , but at 12% well worth the wait.