Hi ya'll, just wanted to bring to your attention an organization named FKP Property Trust (ASX:FKP), which is currently trading at a discount of 62% o f its FTA. In other words, the cost per share is $0.48, though its actual v alue (Net Tangible Asset, NTA) is $1.25. This means that if you invested $1 0,000, you have actually purchased $26,042 worth of property. This is even better than investing in the property market! Investing in arbitrage is the method of Warren Buffet, and is the only method that HONESTLY works. In my experience, day traders (aka gamblers) only talk about their wins, and hid e their losses.
Of particular importance is Stockland (which owns 14% of FKP Property Trust
) is likely going to acquire the organization (it is already part way throu
gh a share acquisition). This is inline with Stockland's strategy to expand
into retirement villages. Stockland started buying FKP shares at $2 a shar
e, though it is currently trading at $0.47. Trading at a value so low below
NTA backing, makes it a sitting duck for takeover. As everybody knows, an
acquisition means the company buys ALL shares at a premium (say 20% of the
current price) meaning you will make a definite gain on FKP shareholdings.
As for the wider A-REIT sector, the return in 2011 was +10% as supposed to
-9.7% for equities. This is not surprising, given - you ever heard your mot
her tell you, invest in property, instead of being greedy and investing in
the share market (where you can lose a lot), or gold (which isn't worth any
thing and is just waiting for a bubble crash)? Even if the country goes int
o war, the land on which property is sitting on is still worth something. C
ontrast this with businesses which close, etc etc. Trust me, don't waste ti
me with mining, retail sector, health care, etc.. if you're new to investin
g, you're lucky you didn't lose 90% of your money (children's savings) in t
he 2008 market crash....
The organization itself is performing extremely well. Profit increased from
$77m in 2009, to $109m in 2010, and now 11% to $121m in 2011. Dividend dis
tribution was doubled from 1.5c to 3c, gearing (debt level) has been reduce
d to 29% since 2009 (and has been consistent for 2010 and 2011). If you loo
k at Announcements, you also notice the Chairman (Seng Huang Lee) who is ov
er the months acquiring more and more FKP shares. To me though, the most im
portant is consensus recommendation (since often, fund managers have access
to "inside" information that we the "public" may not have access to) which
is 100% STRONG BUY (inc. Austock Securities, JP Morgan and Morningstar).
PS: I should note I (the author of this post) own holdings in FKP Property
Group. Yeah, I put my money where my mouth is (unlike a lot of journos who
just talk - but no action).
- posted 8 years ago