CPA - Commonwealth Property Office Fund

[nulla nulla]

The djia is rising on the back of Amercian Printing Presses rolling out new money. The xao is creeping back above 4800, some expecting it to have another go at 5000 on the back of surging resource prices. However reit's are struggling, with cpa finding resistance this week at $0.935 - $0.94 and falling back to close the week at $0.92. Even the release of revised positive property valuations could not lift it closer to the net tangible asset value.

 

[nulla nulla]

In the three days before cpa went into a trading halt, the price was pushed down to from $0.92 to $0.90. Hard to see if this was simply evidence of cpa trading in a downward channel or the results of institutions in the know pushing the price down to get a better discounted price for the capital raising.

The discount price to retail holders will be $0.86 with an entitlement of 1 for every 15 held.

The acquisitions will be earnings positive and the washout of the new issue will have only a small impact on net tangible assets. The property portfolio will improve going from 2 quality properties in melbourne to 5.

It will be interesting to see if the institutions sell their uptake down to this level, erasing the benefit to retail holders taking up the offer as against buying cheaper on market.

Not withstanding, in my opinion, if it does get pushed down to the $0.86 level it would still be a good entry point for a short to medium term trade. Do your own research etc.

 

[nulla nulla]

Okay, I have to admit I didn't see this coming. With the quick take up of the book build by the institutions at $0.86 and the retail offering at the same price being underwritten I expected the price to hold up at the $0.86 level. Worst case scenario I thought it might test the $0.84 level for the issue to Grollo.

The drop to $0.82 seems to be an oversell to me. Closing today on $0.83 today represents a significant discount to net tangible assets, particularly as the dividends are expected to be maintained at the present level and the debt/gearing levels are at lows in line with the stated policy of the company.

It will be interesting to see if the retail offer at $0.86 is fully subscribed, given holders can currently pick up shares between $0.825 - $0.83.

 

[UMike]

In again @82c and willing to double up @ ~80c.

Dividend at Christmass should make any small (paper) loss seem palateble if any.

 

[nulla nulla]

Testing $0.815 cpa continues to trade at a huge discount (25%) to the revised Net Tangible Assets value of $1.09. Apparantly the two key factors causing the low price are:

1. The substantial capital raising by Westfields has contributed to a general sell down of Australian REIT shares as fund managers looking to take up their entitlement reweight their portfolios (sell off other shares) to raise the nessary capital to participate; and
2. Some CPA holders were not happy with the extent of the discount of the Issue (against the NTA) to the institutions and grollo, and have expressed their displeasure by selling off.

Regardless, the current price ($0.82) is roughly 25% discount to NTA and with the 2011 dividend expected to be $0.055, this provides a yield of 6.7%.

Personaly, I expect cpa to recover above $0.92 but do your own research.

 

[IB12]

I was just taking a quick glance of the thread from start to finish.
Funny how all that technical analysis just went out the door when that big diluted retail offer came in.

 

[skc]

Testing $0.815 cpa continues to trade at a huge discount (25%) to the revised Net Tangible Assets value of $1.09. Apparantly the two key factors causing the low price are:

1. The substantial capital raising by Westfields has contributed to a general sell down of Australian REIT shares as fund managers looking to take up their entitlement reweight their portfolios (sell off other shares) to raise the nessary capital to participate; and
2. Some CPA holders were not happy with the extent of the discount of the Issue (against the NTA) to the institutions and grollo, and have expressed their displeasure by selling off.

Regardless, the current price ($0.82) is roughly 25% discount to NTA and with the 2011 dividend expected to be $0.055, this provides a yield of 6.7%.

Personaly, I expect cpa to recover above $0.92 but do your own research.

You seem fixated on CPA... plenty of other REITs offering similar value/return.

CFX, 0.87 (price/NTA), 7.1% (yield)
DXS, 0.83, 6.46%
GMG, 1.34, 5.4%
GPT, 0.81, 6.01%
IOF, 0.8, 6.61%
CQO, 0.68, 6.51%

If you are bullish on the sector may be SLF can cover them all.

 

[nulla nulla]

Not fixated on cpa. Just noticed that there was no thread for it so I started one. I try to limit my posts to the end of each week.

I trade several reits on the swings, among the watchlist of shares traded.

 

[nulla nulla]

CPA tested $0.815 for the second day running but managed to close on $0.825 with the majority of the days turnover going through at $0.82.

The RSI chart shows cpa as oversold but trending back to neutral mainly because the moving average is gapping down to the current share price rather than the share price gapping up to the moving average.



The MACD chart shows the price holding, closing on the moving average. Volumes were lower today than the moving average.



The chart I am not keen on is this one. The Multiple Moving Averages are spreading as the share tracks downward.

 

[nulla nulla]

Not sure if this will work but this week I am posting some additional information in addition to the charts. I learnt of a "open" short sales report at the ASIC, the link is:

http://www.asic.gov.au/asic/asic.nsf/byheadline/Short+position+reports+table?openDocument

According to the report on 03/12/2010 there were 20,703,355 shares reported as "open" short sales for cpa, todays report shows the number of "open" short sales for cpa has dropped to 16,259,991 shares. This would suggest some traders are trading cpa on the expectation that the price will go lower.

This made me curious to compare the "open" short position with the daily Short data from the ASX. http://www.asx.com.au/data/shortsell.txt The following is the cpa data extracted over the last three or so weeks:

15-11-10 Total sales 30,430,216 Gross Short Sales 10,470,404 34.40%
16-11-10 Total sales 17,935,389 Gross Short Sales 17,935,389 38.59%
17-11-10 Total sales 15,954,817 Gross Short Sales 4,269,451 26.76%
18-11-10 Total sales 27,787,221 Gross Short Sales 15,379,611 55.34%
19-11-10 Total sales 11,560,221 Gross Short Sales 5,466,747 47.28%
22-11-10 Total sales 14,568,279 Gross Short Sales 6,929,092 47.56%
23-11-10 Total sales 16,924,889 Gross Short Sales 9,583,113 56.62%
24-11-10 Total sales 11,259,993 Gross Short Sales 1,126,480 10.00%
25-11-10 Total sales 26,613,270 Gross Short Sales 5,044,983 18.95%
26-11-10 Total sales 10,351,446 Gross Short Sales 4,079,337 39.40%
29-11-10 Total sales 8,092,301 Gross Short Sales 2,459,552 30.39%
30-11-10 Total sales 5,078,952 Gross Short Sales 646,917 12.73%
01-12-10 Total sales 30,407,443 Gross Short Sales 25,656,181 84.37%
02-12-10 Total sales 33,505,849 Gross Short Sales 4,333,410 12.93%

The short volume turned over on Wednesday 01-12-10, 84.37% of the days turnover, is greater than the "open" short trades as at 03-12-10. It looks like a few "open" positions were closed out in the following 2 days, which could explain the closing price of $0.84.

 

[nulla nulla]

Turns out the A.S.I.C "open short sales" report is six (6) days behind where the ASX report is for the number of shares shorted on the previous day.
The A.S.I.C. report is almost useless to get an indication of "open" short sales at any given time as the open trades could be closed out without the market knowing at any time.
I wonder if the big players borrowing shares to short the market lobbied for the delay or is A.S.I.C. incapable of providing a genuine end of previous days update.

 

[nulla nulla]

Turns out the A.S.I.C "open short sales" report is six (6) days behind where the ASX report is for the number of shares shorted on the previous day.
The A.S.I.C. report is almost useless to get an indication of "open" short sales at any given time as the open trades could be closed out without the market knowing at any time.
I wonder if the big players borrowing shares to short the market lobbied for the delay or is A.S.I.C. incapable of providing a genuine end of previous days update.

Turns out the report is compiled on information provided "globaly" by 7:00pm each trading day then released after a further three (3) trading days as a "compromise" to the parties providing the data.
For instance "open" short positions are updated on Monday at 7:00pm and the report is released on Friday (generally arround 1:00pm).

 

[nulla nulla]

Tested the $0.865 level before closing on $0.86 (being the spp price). Good recovery from the lows of $0.815 and $0.82 but a long way from the revised NTA of $1.09 and the normal trading range of $0.90 - $0.97.
A dividend advice of $0.0275 today may help push the price up before it goes exdiv. However it wouldn't be good if the market has factored in the div at todays close of $0.86.

 

[nulla nulla]

After going exdiv cpa took a small tumble before consolidating arround the $0.85. This is a little dissapointing given the adjusted nta of $1.09 (with the acquisitions and new share issues). Even the revised valuations notice lifting the nta didn't appear to impress.

 

[nulla nulla]

Friday 31-12-2010 and some end of year profit taking and/or portfolio reweighting by fund managers (?) saw the share price slapped back to $0.83 in the closing auction. The only good thing out of Thursday & Friday's buy sell action is that cpa will start January 2011 from a low point of $0.83 and I elected to run with cpa for the tipping competition in January.

 

[nulla nulla]

cpa dropped back to $0.82 in the first week of January 2011. In the second week it tested $0.845 before closing on $0.835. At this price the yield (on 5.64 cents per share) is 6.75%. Additionaly the price earnings multiple is a respectably low 14.18. The price to nta is at a discount of 26%.
imo what sets cpa apart from the other Australian reit's is that cpa's dividend is paid wholly from earnings.

 

[nulla nulla]

The entry price gets better and the share seems to have more difficulty recovering to a realistic price than can be logically explained. For the moment the trade prospects appear to be to buy at this level and be prepared to unload at $0.835+. Recent movement in the REIT sector doesn't inspire confidence in a quick rebound.
Whispers of take-overs and mergers abound but no one is game enough to say which ones.

 

[nulla nulla]

Hit $0.86 today but ran into heavy resistance, closed out two parcels at $0.855 and continure to hold 4 more parcels looking for the longer term recovery. Will re-enter if it drops back to or below $0.83.

 

[UMike]

Well my long standing 81c order expired Tuesday unforfilled.
Went close though

I'll be happy if it keeps going up now.
Wth the cheque in the mail....All is good.

 

[nulla nulla]

Received a write up in the fairfax papers this week as one of the stocks to buy for 2011. Bounced and closed on $0.875 today. Looks like it could go higher tomorrow. Hopefully cpa will run up to a level closer to the nta, or at least back to it's previous trading range between $0.90 - $0.97.