Value Collector
Have courage, and be kind.
- Joined
- 13 January 2014
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CHC is looking very attractive at these levels in my opinion, I have investments in a few of their property trusts, but up until have only had a minor holding in the actual company.
I have been going over the numbers for the last few days, even woke up at 3am this morning and went to my office to double check the numbers because I couldn’t stop thinking about what a good deal it seems to be at the moment.
So I have put an order in this morning for $13.20, which was above the indicative price of $13.10 at the time, but with long term value plays like this I just want to secure the stock, I don’t generally play, a few cents either side doesn’t bother me, I just want the stock, so hopefully the market doesn’t pop on open and I can get the shares for $13.20.
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The dividend looks small, because it’s only around 3% but they have a pretty small pay out ratio of about 35% of their operating earnings, so are retaining about 65% of their operating earnings.
This capital accumulation inside the business should boost earnings over time in a couple of ways.
1. The capital they retain and invest in their property funds should earn about 6%, in rental income.
2, The increased size of their property fund also means more management fees. (Management fees are based on a % of total funds under management and property values)
3, It allows them to borrow more inside the funds, which again boosts funds earnings and management fees.
Not only that, but I am confident that they should continue to see capital inflows from outside investors into their funds continue to grow as people see diversified long lease property as a good inflation hedge, and potentially a balancing force in their portfolios against stock market volatility.
So for now I am hoping I can get my hands on the stock today for around $13.20, and it will be a 10 year hold at least for me if the numbers play out as I estimate.
I have been going over the numbers for the last few days, even woke up at 3am this morning and went to my office to double check the numbers because I couldn’t stop thinking about what a good deal it seems to be at the moment.
So I have put an order in this morning for $13.20, which was above the indicative price of $13.10 at the time, but with long term value plays like this I just want to secure the stock, I don’t generally play, a few cents either side doesn’t bother me, I just want the stock, so hopefully the market doesn’t pop on open and I can get the shares for $13.20.
————————
The dividend looks small, because it’s only around 3% but they have a pretty small pay out ratio of about 35% of their operating earnings, so are retaining about 65% of their operating earnings.
This capital accumulation inside the business should boost earnings over time in a couple of ways.
1. The capital they retain and invest in their property funds should earn about 6%, in rental income.
2, The increased size of their property fund also means more management fees. (Management fees are based on a % of total funds under management and property values)
3, It allows them to borrow more inside the funds, which again boosts funds earnings and management fees.
Not only that, but I am confident that they should continue to see capital inflows from outside investors into their funds continue to grow as people see diversified long lease property as a good inflation hedge, and potentially a balancing force in their portfolios against stock market volatility.
So for now I am hoping I can get my hands on the stock today for around $13.20, and it will be a 10 year hold at least for me if the numbers play out as I estimate.
