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Anonymous

15 Jan 2020

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How to determine an entry price for a REIT?

When an investor finds a good company (with growth) based on fundamental analysis, how would he/she go about finding the entry price that they are comfortable with?

Do they look at the dividend yield at a particular share price and if satisfied choose that price as an entry price? Consideration of current and historic PBs?

If the share price keeps growing, does it mean that the entry price would have to be re-evaluated.

An example on how to select an entry price would be appreciated.

Discussion (7)

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Bjorn Ng

15 Jan 2020

Business Analyst at 10x Capital

Hey there! For REITs, after checking the main criterias like in increasing dpu & nav, occupancy rate, gearing ratio, usually I take a look at historical yield. Once when the current price reaches around there, that's when I'll enter. You can also look at historical p/b!

A more direct answer (which applies not only to reit) is to have a view on the fair value of the counter, your target return and time frame to hit the target return. If you feel the price is at a % below the current price which is undervalued and in the absence of other factors preventing it from realising the fair value in your target time frame or dragging it further in the near term, then it is a reasonable price to enter

Gabriel Tham

15 Jan 2020

Tag Team Member at Kenichi Tag Team

You can use some technical analysis here to help you find an entry.

Look for support lines if there is a retracement in price. Or if the trend is strong, look for an entry close to the moving average lines.

Else, you can look at historical dividend yields and from there you can look to enter if the yields are not too far off from its historical yield.

Billy

15 Jan 2020

Development & Acquisitions Manager at Real Estate Private Equity

After pinpointing a particular REIT I am interested in, I would usually monitor over a few days to observe investors support / resistance levels. One must understand what causes the fluctuations in terms of REIT prices - News, Interest Rates, Developments. These doesn't happen on a day-to-day basis. Therefore when market is trading purely on investors intuition, it is easier to find the support / resistance level

So if you've done the hard work of evaluating the quality of the REIT (properties, financials, manag...

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