Property Exposure – Are You Watching?

Posted on | by Leon Hinde | Leave a Comment on Property Exposure – Are You Watching?

The recent market rotation towards growth assets and in particular, materials and financials, has resulted in selling utilities and property trusts. In many cases, these names have seen 10 to 20% correction.

The following post takes a quick look at some of the relevant chart patterns.

SCG.ASX (forward yield 4.9%)

scg

SGP.ASX (forward yield 5.5%)

sgp

WFD.ASX (forward yield 3.5%)

wfd

DXS.ASX (forward yield 5.2%)

dxs

GMG.ASX (forward yield 3.7%)

gmg

GPT.ASX (forward yield 5%)

gpt

MGR.ASX

mgr

On the utilities, we think that both Sydney Airports and Transurban should be back on the radar and maybe looking oversold.

SYD.ASX (forward yield 5%)

syd

TCL.ASX (forward yield 4.8%)

tcl

 

 

 

 

 

 

 

 

 

Long TCL

Posted on | by Leon Hinde | Leave a Comment on Long TCL

Long TCL.ASX

TCL

TCL reported 4Q16 traffic – trend remains positive for NSW, some softening is emerging in Melbourne and Brisbane. FY16 Proportional revenue across Australian roads was $1.7 billion. Look for FY17 dividend to increase from $0.45 in FY16 to $0.50 in FY17. This places TCL on a forward yield of 4.2%.

TCL is close to full value short term (12 month outlook) and should be complemented with a $12.70 covered call into March. We’ve collected an additional $0.50 for this call option and we expect to remain exposed to the $0.22 cent dividend in December. This trade allows for some capital gain if exercised. If TCL trades sideways, a combination of the dividend and the call option income creates approximately 10% cash flow on a stand still basis.