ARG - Argosy Property.

https://www.nzx.com/announcements/361633 A little surprising they didn't take $25m in oversubscriptions too.
2.2% a very low rate though so maybe the demand was for $125m at that rate and if they'd taken oversubs the overall rate in the bookbuild would have been higher.

At their last annual meeting I suggested another bond issue because their weighted average cost of borrowing was just on 4%.
So on the $125m issue at 2.2% there's good cost savings of about $125m x 1.8% per annum = $2,250,000. Not to shabby at all in terms of a cost savings exercise and definitely earnings accretive. Nice to lock that in for 7 years too.

With talk of MMT coming around the world and NZ still back in the old inflation model low interest rates look here to stay as MR B has indicated. NZ government Bonds sold into markets at low rates also indicating low rates are here for an extended period of time.

Property has exploded beyond political control.

Little pull back, my order got hit at close for 1.39. Still should see 1.50-1.60 medium term purely based on search for yield. I keep getting an advertisement for a Jasper forecast 6% industrial fund that's getting started. This will be unlisted(illiquid), narrow tenant exposure, buildings require work, much less diversification, lower grade commercial building exposure so that 6% yield has much more risk attached. Pretty easy decision when you compare these advertised syndicates/funds to Argosy to just buy more ARG. Recent industrial land aquired gives potential redevelopment and growth going forward. I suspect ARG is currently trading right near NTA, but will be interesting to see when their new valuations come through.

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Originally Posted by NZSilver

Little pull back, my order got hit at close for 1.39. Still should see 1.50-1.60 medium term purely based on search for yield. I keep getting an advertisement for a Jasper forecast 6% industrial fund that's getting started. This will be unlisted(illiquid), narrow tenant exposure, buildings require work, much less diversification, lower grade commercial building exposure so that 6% yield has much more risk attached. Pretty easy decision when you compare these advertised syndicates/funds to Argosy to just buy more ARG. Recent industrial land aquired gives potential redevelopment and growth going forward. I suspect ARG is currently trading right near NTA, but will be interesting to see when their new valuations come through.

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Yeah I get those. Gearing is 45%, slightly high at any environment let alone these troubled times. To get to 6% payout, likelihood is they are buying second rate properties the larger LPTs are flogging off while they can, at unexpectedly high prices. That isnt to say it will end in tears, might turn out very profitable but Jasper? Never heard of them. I imagine they will enjoy the ticket clipping. Personally I'd prefer to pay a small premium for quality/listed/transparent LPTs for the next few years.

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

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Originally Posted by Waltzingironmansinlgescul

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

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I like it mate. Pretty boring, (I came close to falling asleep at the annual shareholders meeting), but its good to have some boring high yield stuff in one's portfolio.

We are from a family of lawyers, bank staff and and an accountant. There is nothing boring about this wonderful investment. As it turned out we should have sunk over 40% allocation. We are under invested in this wonderful stock. Posting of the forum of Term deposit holders talking to banks and about not renewing there TD's. That is big news!!!! Bigger than any election as far as im concerned.

yes it did find support at the 30 day moving average.
I think momentum is slowing a bit. but still hold.

I meant boring in a kind way. They just keep on keeping on chucking out tax free PIE dividends every quarter no matter what at 4.45% (much higher yield based on my average price), which works out to 6.6% gross for those on a 33% tax rate. Compares very favorably with other REIT's in terms of yield and makes 0.9% per annum on term deposit look like a really stupid idea. You can sleep really well with some of these puppies in your portfolio is what I meant by the term of endearment, "boring".

We believe that MR B's numbers make the stock EXCITING in a time of uncertainty!

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Originally Posted by Waltzingironmansinlgescul

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

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Absolutely, though timing is important. much more fun to buy them around (or below) $1 per share ... and I would not be surprised if they get there at some stage again ...

Attachment 12064

Managed to buy at $1.04 mid April and very happy with this stock. One of the best real estate investments you can make in these times in my opinion and a long term hold.

looks like it found its mojomentum this arvo!

Arg moving higher, great stock great returns considering it's very low risk nature

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Originally Posted by NZSilver

Arg moving higher, great stock great returns considering it's very low risk nature

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Is it really low risk? Sure, they still will be around in a decade and keep paying a dividend - however - SP was eight months ago around $1 ... and there is nothing stopping it to have another dip if & when the recession starts biting. Renting out offices and warehouses won't turn them into the next XRO or Amazon of real estate.

What is the up potential? You think another doubling of the share price is likely? I doubt it.

What is the down potential? Could SP drop to half? Well, they have been there 8 months ago ...

So, yes, good company and sure, NZ might be able to avoid the worst of the recession if we play our hand as "Switzerland of the South" really well.

However - there are always risks in a global storm. Personally I prefer to park my money at that stage into ventures with more up and less down potential.

Thanks for your comments - my bull case is Low debt, diversified, good yield. Cashflow every month. I would be interested in you top picks with more upside than downside

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Originally Posted by NZSilver

Thanks for your comments - my bull case is Low debt, diversified, good yield. Cashflow every month. I would be interested in you top picks with more upside than downside

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Not sure I have time to list them all (and sort of off-subject), but some examples would be e.g. OCA (I go here with Beagle & Mav), INA, CDI - a small property developer trading well below NTA, solid and consistent performer like MFT, PPH, various agricultural (and currently downtrodden) stocks including ATM and SML.

Anyway ... not saying ARG is bad, just feels currently a bit dear. I used to love to buy them around $1 and depending on how NZ Inc comes through the next crisis we well might get there again - or not - this is my risk :):

Yeah agree, I still see arg a lot lower risk then all of those, other than main freight. I'd say arg is at fair value but could move towards 1.60 simply based on where the OCR is heading. I'm very familiar with CDI and have owned previously and own a smaller parcel, a real value play with property on the books at purchase price rather than developed/appreciated price. No debt and plenty of cash. However it is illiquid and more importantly is controlled by MCK and there overseas owners. The big question is will it actually ever realise it's true value and trade towards what is probably worth? Possibly not with it's large holders who I'm sure see it more as a private business and are not to worries where the shareprice sits, reasonable dividend in the mean time though.

Buy more pre results or afterwards? Seems to be holding well mid 140s

This is not getting any attention

Argosy Property Limited (‘Argosy’ or the ‘Company’) has reported its results for the 6 months to 30 September 2020.
Key highlights for the period include:
• Net distributable income up 21.5%;
• Net distributable income per share up 21.2%;
• Robust portfolio metrics maintained with high occupancy (99.4%) and WALT (5.7 years);
• Strong portfolio leasing and rent review outcomes, including 3.8% annualised rent growth on rents reviewed;
• An unrealised revaluation gain of $79.8 million, an increase of 4.3% on book value;
• An increase in net tangible assets per share (NTA) to $1.41 from $1.30 at 31 March 2020;
• Strong delivery on key strategy focus areas including minimising Covid-19’s impact on the business, the continued focus on sustainability and green developments and executing on capital management initiatives;
• Argosy’s FY21 dividend guidance increased to 6.45 cents per share, reflecting continued sound delivery of strategy.