ABG - Abacus Group

[divs4ever]

I hadn't before considered that self storage might be used for e-commerce 'logistics' but makes sense.

yes i saw that trend in 2020 , but could never get my target on NSR , and was hoping that trend continued whilst buying ABP ( and ABPDA and ASK ) ALSO bracket 'ecommerce' with very small businesses/hobbies/collectibles .

 

[finicky]

Apart from population growth, the only tailwind for self storage that I speculated on was more transience and homelessness. Revenue growth of 9% cf FY22 and they're building more of course with fresh capital from the separate listing as ASK. Nothing much happening with the share price of ASK so far today.

 

[divs4ever]

Apart from population growth, the only tailwind for self storage that I speculated on was more transience and homelessness. Revenue growth of 9% cf FY22 and they're building more of course with fresh capital from the separate listing as ASK. Nothing much happening with the share price of ASK so far today.

also businesses downsizing , and home-owners/hobbyists down-sizing and collections can be kept comparatively safe ( and insurable )

not a huge trend but then a lot of REIT niches are dropping in values and income

several years back i was renting ( a very small flat ) but it paid to keep valuable items in a nearby storage facility ( the unit was in an area awash with junkies and paroled criminals ) a bigger unit would still be insecure when i was out working

check out the discretely hidden rising crime rate and rising home insurance premiums ,

but ASK and ABG will have to put the results on the board within the next two years to keep investors happy

 

[Gretsch]

The dividend yield is over 12%. That's mighty high isn't it?

 

[finicky]

@Gretsch
Half year distrbution is 4.25c
Full year distribution guidance is 8.5c. i.e. 4.25 H1 + 4.25 H2 = 8.5c FY24. This equates to a 7.6% yield for the FY24 full year on the current $1.12 share price.
Have you taken full year guidance for FY24 of 8.5c as the final H2 Distribution. I.e 4.25 + 8.5 = 12.75c = 11.3% FY24 yield?

Held

 

[finicky]

At $1.12, ABG is trading at 59% H1 net tangible asset value. I've read it's usual for REITs to trade at a discount but I believe this is uncommonly low. They do have office assets but have said before that these are in prime locations with high rates of occupancy. Other types they have are retail and self storage (through apart ownership of destapled ASK). Learning process for me - first time REIT holder, also bought some DXS and CHC.

From H1 report:
Abacus balance sheet strong with solid asset backing and liquidity
The HY24 revaluation process saw an expansion of Office cap rates by 36 basis points to 5.95%, and the
Retail portfolio cap rate expanded by 20 basis points to 6.36%. As a result, the overall carrying value of
the Group’s investment properties reduced in value by $139 million or 6.4%. Our HY24 net tangible
assets per security was $1.92 with the investment in ASK representing 29 cents3 (or 15%) of total net
tangible assets.

 

[Gretsch]

At $1.12, ABG is trading at 59% H1 net tangible asset value. I've read it's usual for REITs to trade at a discount but I believe this is uncommonly low. They do have office assets but have said before that these are in prime locations with high rates of occupancy. Other types they have are retail and self storage (through apart ownership of destapled ASK). Learning process for me - first time REIT holder, also bought some DXS and CHC.

From H1 report:
Abacus balance sheet strong with solid asset backing and liquidity
The HY24 revaluation process saw an expansion of Office cap rates by 36 basis points to 5.95%, and the
Retail portfolio cap rate expanded by 20 basis points to 6.36%. As a result, the overall carrying value of
the Group’s investment properties reduced in value by $139 million or 6.4%. Our HY24 net tangible
assets per security was $1.92 with the investment in ASK representing 29 cents3 (or 15%) of total net
tangible assets.

Thanks finicky,

I was quoting figures from several sources who all quote over 12% so I dunno how they arrive at that figure, Market Index, Simply Wall Street and Morningstar all quoting similar figures. Are they all wrong??

Still, 7.6% is a good yield and more in line with the market.

I’m looking to maximize my income stream so buying into REITs as I believe a lot of them are good value right now.
From my own experience, I prefer REITs over real property. No hassle, easy to buy and sell, someone else does the work

REITs Held: CHC, CNI, CQE, DXC, SGP
DXS is on my shopping list.

You from Nimbin??

 

[divs4ever]

I was quoting figures from several sources who all quote over 12% so I dunno how they arrive at that figure, Market Index, Simply Wall Street and Morningstar all quoting similar figures. Are they all wrong??

lazy research

probably average the last 3 or 4 ( previous ) div payouts before the demerger

a ticker code change often lets shonky data through

( and maybe they all outsource to data from a third party )

 

[finicky]

I’m looking to maximize my income stream so buying into REITs as I believe a lot of them are good value right now.

Greg Canavan from 'fat tail investment advisory', from whom I took my lead, sees it this way too. He advises on contrarian undervalued sectors or individual stocks that are ignored and likely to pay a dividend/distribution through a market decline.

You from Nimbin??

No, 40 minutes away. Nimbin's where I wanted to live but property values were already inflated when I was looking and the available bousing stock looked poor quality to me. Also I don't like giving an exact location as you never know who's reading and capable of dark designs, as I observed second hand from another site.
But my real reason is 'Nimbin' carries a cachet, lol

 

[finicky]

Re the full year distribution. From the horse's mouth, the HY24 release:

"Abacus Group reaffirms FY24 distribution guidance of 8.5 cents per security and a full year payout ratio
of between 85% and 95% of FFO. Our guidance is predicated on no material decline in current business
conditions."

 

[Gretsch]

Greg Canavan from 'fat tail investment advisory', from whom I took my lead, sees it this way too. He advises on contrarian undervalued sectors or individual stocks that are ignored and likely to pay a dividend/distribution through a market decline.


No, 40 minutes away. Nimbin's where I wanted to live but property values were already inflated when I was looking and the available bousing stock looked poor quality to me. Also I don't like giving an exact location as you never know who's reading and capable of dark designs, as I observed second hand from another site.
But my real reason is 'Nimbin' carries a cachet, lol

Understand, I’m just outside of Nimbin myself so not far away.

 

[Gretsch]

( and maybe they all outsource to data from a third party )

Most likely true.

 

[divs4ever]

Greg Canavan from 'fat tail investment advisory', from whom I took my lead, sees it this way too. He advises on contrarian undervalued sectors or individual stocks that are ignored and likely to pay a dividend/distribution through a market decline.


No, 40 minutes away. Nimbin's where I wanted to live but property values were already inflated when I was looking and the available bousing stock looked poor quality to me. Also I don't like giving an exact location as you never know who's reading and capable of dark designs, as I observed second hand from another site.
But my real reason is 'Nimbin' carries a cachet, lol

at one stage i looked at the New England Tableland ( am not much of a coastal person )

there was some genuine temptations there , but ended up further north

good luck , i think our collective strategies will soon be robustly tested

 

[divs4ever]

Re the full year distribution. From the horse's mouth, the HY24 release:

"Abacus Group reaffirms FY24 distribution guidance of 8.5 cents per security and a full year payout ratio
of between 85% and 95% of FFO. Our guidance is predicated on no material decline in current business
conditions."

i would add a touch of caution to that ( i am familiar with one or two of their assets )

( i hold ABG and ASK , currently my preference is for ASK despite the write-downs likely to come )

 

[finicky]

Not to harp on too much about this, but this is some broker response after HY24 results (from FN Arena via livewire) Below ABG is also ASK, ABG's self storage REIT spin-off for which I think it remains manager and also holds around 20%. Slashed figures in the middle cell are number of brokers deeming buy/hold/sell - so 4 are calling it a buy. Second from last figure is new 'consensus' price target - so that's $1.40.

Held

 

[finicky]

REITs Held: CHC, CNI, CQE, DXC, SGP
DXS is on my shopping list.

It might be of interest that Greg Canavan reversed his guidance on REITs and a bond etf today.
He recommends selling his prior tips: ABG, CHC and DXS. On balance these would be at a modest profit from his entries I think.

This about face follows from his changed view on the future course of interest rates which he previously felt had peaked. He now believes that a rising oil price will be inflationary and put paid to the expectation of rate cuts. As I disclosed, REITs are a new asset group for me, but I take from him that REITs are very sensitive to interest rates. I don't have large holdings so I'll complacently ride out any downturn: DXS, ABG, CHC and ASK.

Held

 

[divs4ever]

It might be of interest that Greg Canavan reversed his guidance on REITs and a bond etf today.
He recommends selling his prior tips: ABG, CHC and DXS. On balance these would be at a modest profit from his entries I think.

This about face follows from his changed view on the future course of interest rates which he previously felt had peaked. He now believes that a rising oil price will be inflationary and put paid to the expectation of rate cuts. As I disclosed, REITs are a new asset group for me, but I take from him that REITs are very sensitive to interest rates. I don't have large holdings so I'll complacently ride out any downturn: DXS, ABG, CHC and ASK.

Held

i prefer ASK over ABG , but hold both , i use REITs mostly as a bond proxy

yes they are sensitive to interest rates , but the smarter operators adjust the leverage for the current times ( only the most courageous would have more than 40% gearing currently,most are trying to stay below 30% )

i am hoping to cherry-pick in selected niches on any meaningful downturn ( in REIITs) namely health-care related , industrial sheds and personal storage

 

[Gretsch]

It might be of interest that Greg Canavan reversed his guidance on REITs and a bond etf today.
He recommends selling his prior tips: ABG, CHC and DXS. On balance these would be at a modest profit from his entries I think.

This about face follows from his changed view on the future course of interest rates which he previously felt had peaked. He now believes that a rising oil price will be inflationary and put paid to the expectation of rate cuts. As I disclosed, REITs are a new asset group for me, but I take from him that REITs are very sensitive to interest rates. I don't have large holdings so I'll complacently ride out any downturn: DXS, ABG, CHC and ASK.

Held

Sold CHC today for a nice profit, never bought DXS it never reached my buy price.
Reluctant to sell ABG as I'm in it for the dividends.