Frasers Centrepoint Ltd. (TQ5:SGX)
TQ5 Google finance Summary
Current price: 1.64
Expected Dividend yield: 5.2%
Trading plan: Buy and hold long term @ 1.63 & below. Dividend play but will sell if price is right.
Background
Frasers Centrepoint Ltd ("FCL") is a well-known property developer like Capitaland, famous for its portfolio of sub-urban malls in the North (Northpoint, Causeway Point, etc.).
Why I buy?
- Exposure to quality reits like frasers centrepoint trust and frasers commercial trust.
- Stable and sustainable dividends at 5.2%. The management have explicitly made a point that their current strategy is to strengthen recurring income, which is good news for sustainability of its high dividends. At the same time, FCL will see growth by recycling property developments to its reits.
- Current valuation at 0.7 Bk NAV is attractive, coupled with strong dividend yield. Personally, these are factors supporting my buy conviction despite the super low public float (amount of shares not held by institutions). Low public float could mean high market spreads and low liquidity. However, I am just a small retail investor who probably would not be affected much by the low liquidity. It is still high enough for me to liquidate my holdings any day.
- Recently announced new reit to be spun off. It will help FCL to realize true value in its Australian assets.
Disclosure: Already vested below at average cost 1.64, am looking to increase holdings should it fall below 1.60 again. So, if you are new to this counter and current price feels good to you, feel free to go ahead and buy. There is much potential for upside for price. DBS reiterated TP of 2.05 in May. Check out my portfolio at the bottom of this page too, powered by sgxcafe.com.
That's my investment idea this time round, DYODD.
