SGP - Stockland Group

So_Cynical said:

Agree totally, we are at the top end of the range for sure and not a place where i would be buying...as far as im concerned upwards of 3.50 is the sell zone.

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Would only be buying and holding at this point if i were doing a dividend play and were confident that sgp would rebound after going exdiv. I actually snuck back in on the open on Wednesday at $3.42 and added another parcel at $3.38 for an average hold of $3.40. I figure if it moves further down I will hold for the December distribution and ease out as and when it comes back above the entry price of $3.42. I considered dropping the first parcel at $3.47 on Friday but decided (after watching the support rallies/volumes) to wait and see if sgp can get back above $3.50 early next week.

Interesting that we can both be involved with the same stocks (DXS & SGP) over a number of years, both profitable and yet both using different time frames, with different risk profiles and profit objectives....the kids could learn a lot, yet i doubt they will.

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You can lead a horse to water etc etc

There was a lot of demand for sgp this week with good volumes pushing the price up to test $3.54 twice through the week. Trade opportunities for the quick and further re-entry opportunities for the brave today as sgp drifted back down to $3.47 (after the initial open of $3.52).



Recent daily volumes have been higher as the market rebalances between those unhappy with the recent profit warnings (sellers) versus those that had already factored in market softness balanced off against the maintained dividends (buyers). With a good dividend coming up in December I considered todays lows of $3.47 - $3.48 a good entry point, even if I have to hold for a little while. As always D.Y.O.R. and good luck.

Of course having bought in at $3.48 - $3.47 the share price danced arround before dropping to test $3.41. What I thought was a long shot bid at $3.42 was quickly filled on the way down. Volumes were better than some of the other reits traded this week. There seemed to be a lot of support in the $3.45 - $3.46 range.



I took some heart the sgp didn't go into free fall on Friday (like some of the other reit shares did) and managed to close out the week on $3.44. The dividend coming up in December of $0.12 is probably under pinning the share price as well as providing a potential fo a combo of capital gain and dividend for those willing to invest for eight (8) or more weeks. As always d.y.o.r and good luck.

As always, just when you think the share is a bargain (with an excellent yield on the forthcoming dividend) it got even cheaper and fell to $3.29 interday on Friday 16/11/12.




A bit oversold in my opinion but then just about every A-REIT is at the moment (in my opinion). Check out he RSI and MACD charts. The yield for sgp is one of the highest going atm (for what it is worth). The grind back today was very wlecome but I hesitate to consider it any more than a temporary bounce.

Sideways between $3.34 and $3.46. Is that a pennant forming? Is it likely to break out upwards before the distribution announcement or hang on at this level then breakout downwards when it goes exdiv?



The update confirmed things have been crook in Victorian residential sales (but the housing and employment figures have been improving). There is a new ceo starting, no doubt there will be a bit of "new broom sweeps clean" write off the crap on the balance sheet and start fresh happening. Things could get worse before they get better. On the plus side the update confirmed the determination of the board to maintain the distribution rate. Time to top up and put your money where your mouth is or cash out and sit back and watch? You decide.
As always do your own reseach and good luck. .

I reckon Stockland is a good thing at the moment, closed on Friday at $3.41 one of the few quality stocks not to rise with the market over the last 3 > 4 months...i would think that there is some potential for SGP to rally over the next few weeks.

So_Cynical said:

I reckon Stockland is a good thing at the moment, closed on Friday at $3.41 one of the few quality stocks not to rise with the market over the last 3 > 4 months...i would think that there is some potential for SGP to rally over the next few weeks.

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I agree. We have been trading it regularly since April last year and managed to take positions prior to December 21 to earn the div and take a capital gain. The div is due arround 28 February and the estimate is $0.12 per share. There is also a report due this month. The last profit update was in relation to the tough residential sales conditions SGP were experiencing in Victoria and to a slightly lesser extent NSW. Although it was acknowledged the profit forecast would be lower, it was not considered material enough for them to revise the distribution down... at that time. The residential sales for Victoria and NSW have improved slightly for December and January, hopefully the distribution is still on track for $0.12 per unit.

The share price was starting to rally until early last week, climbing up to test $3.57. However it collapsed when the Mirvac write downs hit the press. This had a damper on the SGP share price pushing it down over 3 days to level off at $3.41. However, the interesting thing about the Mirvac property write offs, the related mostly to unit developments in Queensland with one of the larger write offs being somewhere between Brisbane and the Gold Coast. Developments that were initiated some 4-5 years ago that the new GM of Mirvac decided it was time to get them off the books. This propert write down was for a different state and market to the SGP exposures.

Additionaly, Australand reported a better result than was expected with improved residential conditions. This is more like for like market exposure with SGP than Mirvac. Accordingly we elected to get in when it dropped away from the mid $3.50's. We were in the queue at $3.48 but our order got filled at the opening price of $3.45 thursday (even better) and back up order at $3.43 was filled on Friday averaging our hold down to $3.44. I looked at topping up at $3.41 to bring the average down to $3.43 but decided to hold until monday.



The volumes of daily turnover were higher than usual in the later part of the week. However for every seller there has been a buyer and it hasn't been a panic sell off. The share price may fall further but in my opinion the prospects of another interest drop will underpin the share price to some extent. I'm in and prepared to buy more to lower the average further if I can. As always do your own research and good luck .

Why is it so?

It seems to me that SGP's report today is less than average and yet the share price has risen.....

What am I missing?

Comments welcome.

Thanks

Rick

Muschu said:

Why is it so?

It seems to me that SGP's report today is less than average and yet the share price has risen.....

What am I missing?

Comments welcome.

Thanks

Rick

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The writedown on residential projects and inventories was well flagged. The fall/share price response has already happened over the last few weeks, as SGP underperformed while the rest of the REIT sector made new highs. Today's price movement was exactly the same as MGR last week.

I had it on close watch but was expecting may be 2-3% fall before a slight positive close. It didn't fall to my order, and it left my sight when it started to run.

The market's view is that this is the bottome of the cycle and is willing to look past the last report, not to mention the 6.5% yield that is maintained.

skc said:

The writedown on residential projects and inventories was well flagged. The fall/share price response has already happened over the last few weeks, as SGP underperformed while the rest of the REIT sector made new highs. Today's price movement was exactly the same as MGR last week.

I had it on close watch but was expecting may be 2-3% fall before a slight positive close. It didn't fall to my order, and it left my sight when it started to run.

The market's view is that this is the bottome of the cycle and is willing to look past the last report, not to mention the 6.5% yield that is maintained.

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Well it's beyond me but, given I bought at $3.51, I won't complain..

Thanks skc.

Rick

Muschu said:

Why is it so?

It seems to me that SGP's report today is less than average and yet the share price has risen.....

What am I missing?

Comments welcome.

Thanks

Rick

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The share price was oversold when it was pushed down recently from $3.57 to $3.45. Elements of the market seemed to anticipate a write off of Queensland residential assets to a similar level as Mirvac. Unfortunately I missed the opening price on Monday as I was travelling. I hope some of the people reading and/or contributing to this thread were able to get on at the $3.36 open.

skc said:

The writedown on residential projects and inventories was well flagged. The fall/share price response has already happened over the last few weeks, as SGP underperformed while the rest of the REIT sector made new highs. Today's price movement was exactly the same as MGR last week.

I had it on close watch but was expecting may be 2-3% fall before a slight positive close. It didn't fall to my order, and it left my sight when it started to run.

The market's view is that this is the bottome of the cycle and is willing to look past the last report, not to mention the 6.5% yield that is maintained.

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Like skc I was expecting another slight dip after open today as the unhappy report readers bailed out. But like skc, I also expected a bit of a rally as most of the negatives in the report have well and truly been factored in since September last year. The new broom sweeps clean in respect of the write downs and the changes to how interest will be expensed rather than capitalised. These aspects as well as the slowdown in selling off of office assets were well received.

Muschu said:

Well it's beyond me but, given I bought at $3.51, I won't complain..

Thanks skc.

Rick

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I was only expecting it to hit the low to mid $3.50's and sold way too early at $3.54. To me it looks like the market response and rally may have encouraged some shorters to consider it would be a good time to close out their positions. I will be watching for a re-entry on any retrace. I'm happy

SGP has continued to climb since August 2011 alongside the rest of the A-REIT's but encountered some resistance today when it was pushed down to test $3.75 soon after openning. Fortunately it received significant support at the $3.77 - $3.78 levels and then rallied before the end of the day to test $3.84, before closing on $3.83.




Like most of the A-REIT's, SGP has benefited from the immigration from Gold and Resources to safe haven yield bearing shares. I would not be surprised, in the near future, to see it re-test the recent highs and move above $3.90. As always do your own research and good luck.

nulla nulla said:

SGP has continued to climb since August 2011 alongside the rest of the A-REIT's but encountered some resistance today when it was pushed down to test $3.75 soon after openning. Fortunately it received significant support at the $3.77 - $3.78 levels and then rallied before the end of the day to test $3.84, before closing on $3.83.

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Merrill talked about potential capital raising this morning probably caused the weakness. It's in the AFR.

skc said:

Merrill talked about potential capital raising this morning probably caused the weakness. It's in the AFR.

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Must try and find it. What ever was said certainly caused a spike down. We saw it as an opportunity and jumped in at $3.77. Can't see why they would need to raise capital unless they were looking at an acquisiton?

Over the last ten (10) days SGP has rebounded from lows of $2.75 to test low $3.90's, dropped back to low $3.80's, and then surged again to retest low $3.90's before appearing to collapse on Friday to close out the week below $3.80. But did it really collapse or was it pushed?



Early this week SGP was finding solid support in the $3.85 area but having trouble getting above $3.86. On Wednesday it dropped quickly to $3.83 after the market opened then climbed steadily to test $3.94. An eleven cent spread (gain), amazing. There was no news or market updates to prompt a surge. Gold appears to have stabilised, so it wasn't funds being transferred into A-REIT's for the yield. I thought it may have been options settlements or shorts being closed out accelerating the run-up combined with low interest foreign investments chasing our yields, other than that I have no idea?

However, after the surge on Wednesday, SGP appeared to be pushed down on Friday. Opening at $3.85 (already well down from Wednesdays close), SGP ran up to $3.87 immediately after open only to be sold down progressively to $3.83 where it traded for a short while (turned over 1 million plus shares) than was sold down very quickly to $3.77 - $3.78, where it stayed with solid turnover until midday. Come lunch time (12:00 noon to 2:00pm) SGP clawed it's way back to $3.79 - $3.80, with the occaisional testing of $3.81. Turnover was subdued (retail investors?). Then with the end of lunch time (2:00pm) the sellers were back and SGP was pushed back down to $3.77 - $3.88. Volumes jumped and (fortunately) most of the turnover was at $3.78. Come the auction, over 4 million shares were traded with the closing price being pushed up to $3.79. Maybe someone wanted the price down to accumulate?

I also noted that Australand and Mirvac (who also dabble heavily in Residential property) were also down but they were only down arround 2% compared to SGP's 3%. I'm not aware of any significant new bad news for housing sales etc and I fond it odd the SGP was sold down so heavily in comparison.

As always do your own research and good luck.

It seems that the Victorian Government has finaly recognised the importance of the Building industry to their economy and has decided to do something about stimulating the sector.

An increase of the "first home buyers" grant to $10,000.00 on new homes and a 40% drop in stamp duty.

http://www.heraldsun.com.au/news/vi...ngs-fast-tracked/story-e6frf7kx-1226631141536


This should play in favour of the likes of SGP and other A-REIT's with residential development projects in Victoria. I say "should" because sometimes it seems that nothing is ever logical in the A-REIT market. It will be interesting to see if there is any market reaction today. It would be even better if NSW and Queensland followed Victoria's lead.

Disclaimer: Yeah I hold SGP, as always do your own research and good luck.

Nice bounce yesterday. Managed to close on $3.86 after tapping $3.89 during the day. A large volume was traded at $3.87 but buyers seemed reluctant to push higher.

Interestingly the Japanese market was closed for a holiday. Today will be interesting to see whether the weekends news can continue to support the share price and whether the Japanes market being open makes a difference to the buying/selling.

Disclaimer: We still hold

Is anyone else trying to trade this?



The highs were getting lower and the lows were getting lower. It looked like SGP was on a slide and would break through what appeared to be a recent support area of $3.75. In the lead up to the report from the new General Manager, Mark Steinert, the market appeared to be torn between the investors chasing yield and the profit takers expecting the share to drop if SGP did a capital raising. Then the report comes out and SGP spikes up to $3.96, drops back to $3.85 and closes on $3.89 on good turnover. Not much has changed.

The Fairfax papers (Sydney Morning Herald) BusinessDay has two articles on Stockland worth a read. Basicaly if, Mr Stienert gets his juggling act to reduce cost and generate growth across the portfolio right, the share price will "soar" and if not.............

We took advantage of the price surge after yesterdays open and reduced our holdings to two (2) parcels. The undertaking to maintain the dividend at $0.24 per annum means there will be a $0.12 distribution for June (payable in August). It could be worth a hold for yield and/or capital gain from here. We will just have to wait and see. As always do your own research and good luck .

nulla nulla said:

We took advantage of the price surge after yesterdays open and reduced our holdings to two (2) parcels. The undertaking to maintain the dividend at $0.24 per annum means there will be a $0.12 distribution for June (payable in August). It could be worth a hold for yield and/or capital gain from here. We will just have to wait and see. As always do your own research and good luck .

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SGP has been on a EPS downgrade cycle for some time, although looking at the share price chart you wouldn't know it at all. While other REITs are on mostly upgrade cycles, you have to pin the blame on management.

The yield is the obvious reason for holding, yet they are now paying out much more than they earn for FY13.

Trading-wise I've avoided this name for some time because of the review (it was widely tipped that dividend would be cut). It wouldn't surprise me if the market prices it closer to 5% yield over the next month or 2.

skc said:

SGP has been on a EPS downgrade cycle for some time, although looking at the share price chart you wouldn't know it at all. While other REITs are on mostly upgrade cycles, you have to pin the blame on management.

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It looks like the "blame" exercise was started with the board when it was agreed to let the former general Manager go, gracefully with thanks for steering the company through the GFC (and into it?). Now the new broom, Mark Stienert, has decided to let a few more people go...gracefully and with thanks for their efforts. It would seem he has found a few areas for cost savings across the sectors.

The yield is the obvious reason for holding, yet they are now paying out much more than they earn for FY13.

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If I understand their figures correctly, the bulk of their income comes from retail which is showing signs of improvement. Retirement is tough atm and Residential development in Victoria and Queensland is suffering a big slow down. Income is still fairly sound. The profit warnings have been basically the result of two (2) lots of large impairments taken to book in respect of the land holdings acquired in the early 2000's for future development that they have now decided do not meet their plans/requirements for future development. Bit of a cleanup of the balance sheet.

Trading-wise I've avoided this name for some time because of the review (it was widely tipped that dividend would be cut). It wouldn't surprise me if the market prices it closer to 5% yield over the next month or 2.

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The lack of a need to go back to share holders to raise capital is a good thing. Part of the reason for the recent sell down was the prospect of a capital raising. I think you mentioned in an early post that this was reported in the AFR. If the market were to move SGP share price, from the current yield level arround 6% to a 5% yield level, it would be a fantastic outcome for long term holders and those that bought at the recent share price bottoms.


It might take more than a couple of months though . I can't vouch for the earnings figures in the above table. The figure was taken from Huntleys as provided in comsecIress and probably includes the impairments in the Fembruary market update from SGP. As always do your own research and good luck.

Another article in todays SMH BusinessDay titled "Stockland tips steady rise". I wonder if the market will follow through?

And yes we still hold, for now.