Questioning the REIT of Return

Feb 3rd, 2009 – Comment

Hey Lou! Could you please indulge me and analyse Whiterock REIT WRK.UN-T ? What should I read from the recent 1 for 3 consolidation? Can it sustain the huge yield percentage its paying? Is it too good to be true? I am thinking about buying more. Thanks, Ian Hi Ian, Whiterock is an interesting case in its […]


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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REIT OF RETURN

Hey Lou!

Could you please indulge me and analyse Whiterock REIT WRK.UN-T ? What should I read from the recent 1 for 3 consolidation? Can it sustain the huge yield percentage its paying? Is it too good to be true? I am thinking about buying more.

Thanks,

Ian

Hi Ian,

Whiterock is an interesting case in its offering a killer yield of over 22%. However the units have been in a sell off and that is not something to trifle with in this environment. The sanctity of distributions is the key as is the renewal rate on their leases.

MACD TURNING UP

MACD turning up

I looked at information provided by the company and they seem to have a solid portfolio of clients from government and institutions which have a lower risk profile than other tenants.

Whiterock also has a diversified geographical base and has been hacking away at their payout ratio. After a steep decline that started in July of 2008 the MACD is turning up from an oversold position but the volume has thinned out in the last week.

The last three candlesticks are all indicating that the market is uncertain as to the direction of WRK.UN and that’s the trick at this point. If it breaks and stays above $16 it could run to $22 without much trouble. I think that if you like the story and are comfortable with the risk, and lets face it a yield that is over 22% has to encompass risk, then you should move on this.

Happy Capitalism!

Categories: Trusts
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