Dexus – Buy Signal

Posted on | by Leon Hinde

is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The short-term momentum indicators have turned positive and we see buying support increasing within the $11.50 – $12.00 price range.

REITs in Review

Posted on | by Leon Hinde

A number of REITs announced their 3Q19 operational updates yesterday.

Dexus forecast 5% underlying earnings growth.  reaffirmed its FY19 guidance for 5% growth.

Mirvac indicated their FY19 guidance will be in the 3 – 4% growth range with DPS growth at 5%.

Across the sector it is likely residential and retail remain the weak spots, whilst  office and industrial will continue to provide strong growth. Softening of the retail sector was evident in GPT’s March quarter business update.

Despite GPT’s exposure to retail, the office exposure along with the groups strategy to expand the footprint in logistics, makes the stock one of our preferred opportunities within the REIT sector.

 

 

 

 

 

Real Estate Investment Trusts – Outperform

Posted on | by Leon Hinde

Our Algo Engine has the following group of REITs under  buy conditions CHC, DXS, GMG, GPT, LLC, SCG, & VCX. These names all sit in the ASX 100 model portfolio.

Chart Hall Group is the best performing REIT within our models, up 54% after holding it for 574 days.

REITs have performed very well in recent weeks, due to the  moderating outlook for bond yields. If yields remain under pressure, defensive asset
classes, such as A-REITs and utilities will outperform through 2019.

A slowing global growth picture, low bond yields, rising equity market volatility are generally seen as positive catalysts for defensive sectors. The recent run up in these names means much of the value has already been captured. Therefore, we recommend investors use covered call options to enhance the income return.

As an order of preference, we feel large scale logistics, followed by office and then residential. 

EPS growth for the sector is running around 4 -5% and dividend yields are near 5% also.  Add a covered call and you’re able to achieve 10% annualised cash flow.

For more detail on covered call strategies please call of our office on 1300 614 002.

CHC

SLF Property ETF