|Share Price when posted||Short Term View||Long Term View||Current Share Price|
FA Bearish until 2018
*Latest update* – 25 Apr 2017
Cache short term bull has reach its peak.
(Congrats to those whom have gained 8% in 3 weeks :))
Do take note of the selldown tomorrow!
(Especially when stock is on XD)
P.S. Always do your own due diligence before taking any action.
Last posted 19 Mar 2017
While screening through stocks that are in the right industry (i.e. E-commerce related), Cache Logistics Trust (Cache) came into mind.
Cache is a Singapore-based real estate investment trust (REIT). The Company’s principal activities are those relating to investment in income producing real estate and real estate related assets, which are used for logistics purposes in Asia Pacific, with the primary objective of providing Unitholders with regular and stable distributions and long-term capital growth.
Caches’ portfolio comprises approximately 20 logistics warehouse properties, established in logistics clusters in Singapore and China. Cache’s portfolio specializes in logistics warehouses serving a group of multi-national and local third-party logistics providers (3PLs).
Its portfolio has a total gross floor area of approximately 7.5 million square feet. Its properties include Schenker Megahub, Hi-Speed Logistics Centre, Cache Changi Districentre 1, Pan Asia Logistics Centre, Air Market Logistics Centre, 127 Orchard Road, 404-450 Findon Road and Jinshan Chemical Warehouse.
In order to save our precious time on Fundamental & Technical analysis, my team and I have created a page to help us on the same – https://www.investwhizz.com/stock/?stockcode=K2LU
(you may register with us for free to use the tools – do note that the tool is in work-in-progress mode and we are working hard to include more features while you are reading this)
Key Fundamental Analysis Points:
- Cache is providing a high dividend yield of 9.48%; however, we noticed that the dividend per unit (DPU) has peaked in 2013 and is decreasing year on year (this would suggest that the drop in share price is causing the yield to be high). Going by the trend, we would expect DPU to drop further in FY17 as well.
- Main reason for the fall is due to the “over supply” situation where industrial properties continue to soften in Singapore (Supply of 2Mil St ft would be entering into the market in 2017
- Posted a net loss position due to large impairment of property (total fair value gain from 2010 was 96M while 145M was written off in 2015 & 2016).
- Debt/Equity ratio is rather on the high side at 43% (highest gearing over last 6 years)
- Dispute between DB Schenker & CP (noted that this was resolved recently)
- Interest cover is 4.5 times (while it is still not too bad, it has drop from 7x in 2013.
- Price/Book ratio of 1.04 suggest that market is currently trading close to book value.
- While we can see that Cache is in the right industry of E-commerce, they are currently not in the right timing (i.e. over supply situation)
Key Technical Analysis points:
- Stock has taken a beating and are currently trading below the 2 key resistance line of 0.825 & 0.855. However, we have noted that the immediate trend have changed from downtrend to sideways.
- We can see that there is a gap down at 0.855, market could try to close that gap over next few days before settling on the direction.
- Immediate term: look out for the potential break out over the next few days
- For mid term trading, I would wait for 0.855 to be achieved and for the price to stabilize on top of 150MA & 200MA before taking any larger positions
- Not in over bought region, small momentum of the stock seems to be coming in
In summary, for Value Investor/Mid term, Cache seems to be a sound company in the right industry but would require more patience for the “over supply” situation to be fully absorbed for the stock to go up over time.