Tuesday, 27 December 2016

Defensive Reit: First Reit

First reit will be having an EGM on 28 Dec 16. The EGM will focus on the acquisition of the SHLB, which is located at JL. Gabriel Gampur. First Reit will be buying SHLB at ~$20M. My own assessment is that acquisition is a good one as the management is buying a good property at a discount. With President Joko's emphasis on health care, i firmly believed that First Reit will continue to do well.

Dr Ronnie, the CEO has been buying First Reit from the market and this shows that the counter is undervalued. From a Fundamental Analysis (FA), the company revenue and profit, and DPU have been increasing Y.O.Y. The company has a positive cash flow of $82M. From the Technical Analysis, it has found support @ 1.25. Trend reversal observed and First reit closed higher at $1.27 today.  I believe more retail investors will be buying First Reit after the EGM tomorrow.

source: Financial data from SGX and chart from Chartnexus

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