ARG - Argosy Property.

[Baa_Baa]

You know me, I have the greatest respect for TA but there's one other consideration.
Retiree's or those approaching retirement like me might think 8.27% gross effective yield in a company that's pretty safe and has a track record of increasing dividends is pretty attractive income and if it goes a bit lower then can add some more. Its tempting...

And the yield will become more attractive the lower the buy price gets. If you can afford to miss a Div or two there's no reason why you'd risk capital buying or averaging in right now. But you know this, never buy a downtrend with no end in sight. Patience is the hardest lesson in investing, imo.

[Waltzing]

Yes the current down trend could go on for a while BA....

We have been trading this Company for since before the GFC....

If your just running a private portfolio for yourself as a private investor then your advise is on the MONEY.

our backends are automated and have inter company transfers.

not the same game....

expecting 110

and private investors mostly dont have forensic data parsing to backup any audit requirements.

[Beagle]

And the yield will become more attractive the lower the buy price gets. If you can afford to miss a Div or two there's no reason why you'd risk capital buying or averaging in right now. But you know this, never buy a downtrend with no end in sight. Patience is the hardest lesson in investing, imo.

Yes I know this but downtrend or not if Waltzing man is correct and it gets to $1.10 which is a 9% gross yield...its going to be awfully hard to resist getting the truck out and backing it up.

$1m @ 9% gives $90,000 retirement income = job done, retire early.

I've seen a lot of clients do extremely well with commercial property over the years. The coming recession won't last forever...

[Entrep]

$1m @ 9% gives $90,000 retirement income = job done, retire early.

Badda bing badda boom!

[Waltzing]

"is correct and it gets to $1.10 "

Its blowing in the wind as Balance said.

But the steeper the sell off the more likely it is to over sell on the down side... isnt that what the eXperts say?

The problem here is that the PIE at 33 will likely halt this. NZ investors have been making money on property for so long they are battled harden.. vets...

110 is where the chart was back in 2019.....

a lot of stocks on the NZX are now in a range trading environment for the next 12 months.

not a stat or chart eXpert but the little lines on the paper are there for all to see ......

[LaserEyeKiwi]

I thought the result was slightly underwhelming, but at least the market appears to have reacted positively so far.

I notice that 7 Waterloo Quay facade repairs are recorded as requiring $1m expenditure in FY21 and $14.5m expenditure in FY22, being $15.5m all up not counting any residual costs yet to be incurred in FY23. That is a major maintenance outgoing for a single building, when maintenance capital expenditure for all the rest of the portfolio in FY22 is stated at $5.8m! This seems to be the underlying reason for the dividend payout ratio to AFFO being 114%.

NTA now $1.74 per share and with no DRIP currently being offered the number of shares on issue should remain stable in FY23. Guidance at 6.65cps for FY23 being a 1.5% increase is not great considering inflation is much higher, and no DRIP is a reduction for those shareholders who participated ( ie give with one hand and take away with the other ).

The completion of 8 - 14 Willis Street, the largest capital project by far, is a significant de-risking factor given occupation by Statistics NZ is just about underway. And hopefully rental abatements to tenants ( $1.6m in FY22 ) are a thing of the past?

Looking forward to the AGM on Tuesday 21 June, when I will ask a few questions.

The only thing that keeps me away from investing in ARG is their 27% portfolio exposure to Wellington Office towers - and all the accompanying seismic risk that brings with it. If they start divesting those buildings it becomes much more attractive to me.

[Baa_Baa]

Yes I know this but downtrend or not if Waltzing man is correct and it gets to $1.10 which is a 9% gross yield...its going to be awfully hard to resist getting the truck out and backing it up.

$1m @ 9% gives $90,000 retirement income = job done, retire early.

I've seen a lot of clients do extremely well with commercial property over the years. The coming recession won't last forever...

I can just imagine your consternation if you bought $1m at $1.10 for 9% yield and the SP continued to lose another 25% capital, let alone the missed yield opportunity at that lower SP, but as you say the coming recession won't last forever ... and there's always medication available for anxiety and sleepless nights.

[winner69]

If next year dividend is 6.65 cents and its going to grow at 1.5% pa over time and beagle wants a 5.4% return (8.0% gross) then ......

............. then ARG intrinsic value is $1.74 using the Dividend Discount Model

ARG reported NTA is $1.74 ...... isn't that spooky, really spooky

[Waltzing]

a 100 handle on the SP would take the price back to 2018....

and that is only likely if there OCR hits 5 or over...

Its got to be the best value on the nZx at that price if your on 33.. plus every other insurance and tax thats coming... or was coming as the business, professional and farming communities panic ...

ARG has been around for a long time and isnt going bankrupt any time soon in the current climate.

an AP of sub 100 would only occur on a global financial crisis and there is always one of those just around the corner...

land use scarcity is only going to become more acute and finally one of the listed companies has stated it clearly.

They are finding it hard to get land where they need it. They are going to have to repurpose buildings and in some cases just cut then down and start again..

the market is shorting the stocks in relation to bonds..

but the NTA calculations have nothing to do with bond yields surely Winner(n)!

and this has lead to the "SHORT" or flight of capital.

[winner69]

If next year dividend is 6.65 cents and its going to grow at 1.5% pa over time and beagle wants a 5.4% return (8.0% gross) then ......

............. then ARG intrinsic value is $1.74 using the Dividend Discount Model

ARG reported NTA is $1.74 ...... isn't that spooky, really spooky

Doesn't seem right ....but a cash divie yield of 5.4% is 8.0% gross isn't it?