CREIT (Symbol - REF.UN)

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oppositeset
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CREIT (Symbol - REF.UN)

Post by oppositeset »

Hi guys

I'm looking to start a position in CREIT.... What is a good entry point in your opinion ?
Thanks
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AltaRed
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Re: CREIT (Symbol - REF.UN)

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It appears expensive right now. Near a 52 week high, trading over BV, yield under 4%. A better entry point would be in the $40-45 range. Look at a 5 year chart.
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Spidey
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Re: CREIT (Symbol - REF.UN)

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I agree. REITs seem to go on sale every once in a while. You just have to wait.
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Re: CREIT (Symbol - REF.UN)

Post by Peculiar_Investor »

AltaRed wrote: 04 May 2017 13:08 It appears expensive right now. Near a 52 week high, trading over BV, yield under 4%. A better entry point would be in the $40-45 range. Look at a 5 year chart.
I don't follow REITs, but I would be interested to understand the methodology that you've used to determine the $40-45 entry point range? Is it related somehow to your mentions of book value (BV) or yield? Or is it fundamental analysis, technical analysis, eyeballing the 5 year chart, darts?
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AltaRed
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Re: CREIT (Symbol - REF.UN)

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It is throwing darts..... Seriously though, in the case of a steady eddy diversified REIT like Canadian REIT, it is mostly based on trading range over the past 3-5 years and what the latest MD&A is saying about organic development. In this case, I would only buy around the $40-41 range (near trading range lows) and circa 90% or so of BV. IMO, a good quality REIT will have under 50% leverage and less than 80% payout of AFFO. It will not be high growth but it will be a conservative base runner which is all I ask for in retirement.

There is no singular way to evaluate a REIT. Each needs to be looked in the context of its industry as you would Industrials vs Transportation vs Energy, etc.
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Arby
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Re: CREIT (Symbol - REF.UN)

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AltaRed wrote: 05 May 2017 11:08 ... would only buy ... circa 90% or so of BV.
I think you must have meant 90% of NAV (Net Asset Value), not BV (Book Value). NAV is an estimate of the market value of the REIT properties. BV is the historical cost of the properties minus depreciation, which is pretty well useless for evaluating a REIT.
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Re: CREIT (Symbol - REF.UN)

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Arby wrote: 05 May 2017 11:58
AltaRed wrote: 05 May 2017 11:08 ... would only buy ... circa 90% or so of BV.
I think you must have meant 90% of NAV (Net Asset Value), not BV (Book Value). NAV is an estimate of the market value of the REIT properties. BV is the historical cost of the properties minus depreciation, which is pretty well useless for evaluating a REIT.
Indeed I did.... :oops:
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snowback96
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Re: CREIT (Symbol - REF.UN)

Post by snowback96 »

http://www.choicereit.ca/English/news-a ... fault.aspx

Canadian REIT is being bought by Choice Properties REIT. What are people's thoughts on taking the shares in CHP.UN vs the cash?

Normally, I would just take the shares since this saves me from having to plug a hole in my REIT portfolio and defers any capital gains taxes. However, in this case, the Loblaws folks (L and WN) will still own a 65% controlling stake in the combined entity. All things being equal, I prefer to steer clear of stocks where another company (or, even worse, a single family) have so much control. Thoughts?
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Re: CREIT (Symbol - REF.UN)

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snowback96 wrote: 15 Feb 2018 10:24 http://www.choicereit.ca/English/news-a ... fault.aspx

Canadian REIT is being bought by Choice Properties REIT. What are people's thoughts on taking the shares in CHP.UN vs the cash?

Normally, I would just take the shares since this saves me from having to plug a hole in my REIT portfolio and defers any capital gains taxes. However, in this case, the Loblaws folks (L and WN) will still own a 65% controlling stake in the combined entity. All things being equal, I prefer to steer clear of stocks where another company (or, even worse, a single family) have so much control. Thoughts?

I have the same concerns you have with the Weston family maintaining control.

I wonder why the REF shares are trading at a significant discount to the deal price.
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Re: CREIT (Symbol - REF.UN)

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I would never own a REIT that was dependent on one major tenant so I would have never owned Choice to begin with. I still wouldn't do it with 65% parent control. The same reason I would not own ENF due to potential parental conflicts of interest.
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Re: CREIT (Symbol - REF.UN)

Post by jay »

I sold mine this morning and was content to receive $52.25 per share. My ACB was $44 so I will likely have to find a loser to offset the gain with, which is not hard at all in this current environment.
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Re: CREIT (Symbol - REF.UN)

Post by RomaneeConti »

Have held CREIT since 2011 and in a RRSP. The offer has a maximum cash amount of $53.75, subject to pro-ration. The deal will close April 2018, and during the next month I will make my choice - which probably will be to take all cash.

As mentioned, yesterday's close was lower than the current offer value, so arbitrage action may fill the gap as the close date approaches. Also sweeter offers are possible.
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Re: CREIT (Symbol - REF.UN)

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RomaneeConti wrote: 16 Feb 2018 04:16 Have held CREIT since 2011 and in a RRSP. The offer has a maximum cash amount of $53.75, subject to pro-ration. The deal will close April 2018, and during the next month I will make my choice - which probably will be to take all cash.
You may not get all cash since it is subject to pro-ration. If you want to guarantee all cash, you need to sell on the open market.
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Re: CREIT (Symbol - REF.UN)

Post by RomaneeConti »

AltaRed wrote: 16 Feb 2018 12:39
RomaneeConti wrote: 16 Feb 2018 04:16 Have held CREIT since 2011 and in a RRSP. The offer has a maximum cash amount of $53.75, subject to pro-ration. The deal will close April 2018, and during the next month I will make my choice - which probably will be to take all cash.
You may not get all cash since it is subject to pro-ration. If you want to guarantee all cash, you need to sell on the open market.
You are right, of course. I may have to sell sooner than deal close date.
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snowback96
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Re: CREIT (Symbol - REF.UN)

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The market isn't looking very kindly on this deal. Both stocks taking it on the chin. With REF.UN trading 8-9% below the offer price, I guess I'll hang on for now. With any luck, it will slowly drift up until the deal closes. Worst case scenario, everybody gets 42% cash and 58% CHP.UN.
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Re: CREIT (Symbol - REF.UN)

Post by Malcolm581 »

My thoughts are the follow:

Choice’s major tenant is Loblaws combined with CREIT assets = a strong Reit.

CREIT’s CEO will run the new company bringing his CREIT philosophy to the new company which hopefully creates a strong company which continues to reward share holders with regular dividend increases.
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snowback96
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Re: CREIT (Symbol - REF.UN)

Post by snowback96 »

The combined company may look good on paper (strong assets, strong management), but the conflict of interest is huge.

If you are your boss' landlord, how objective and aggressive are you going to be when the lease is up for renewal?
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