Thursday, July 6, 2017

Recent Action - CDL Hospitality Trust

This is a continued trilogy event for CDL Hospitality Trust which I have previously wrote here and here.

Today, I managed to divest the majority of my mother share for 50,000 shares at $1.62 in the open market. This is after the shares have went ex-rights on Monday, so I am pretty surprised at their strong performance in the market today.

The divestment yields me a decent 28% gains (inclusive of dividends) for a period of about 6 months. This has been my top position since the start of the year and I am fortunate to be holding it as this is the top performing Reits in 2017 from the hospitality comeback.




The original share price was $1.68 before they announced the acquisitions and the rights issue that day. The TERP works out to be at [(1.68 x 997,728,705) + (1.28 x 199,545,741)] / (997,728,705 + 199,545,741) = $1.61

The share price then went on a few turbulence as the market absorbs the news and fall to last Friday closing at $1.655.

Based on the last Friday closing of $1.655, the revised TERP is [(1.655 x 997,728,705) + (1.28 x 199,545,741)] / (997,728,705 + 199,545,741) = $1.5925.

Today, the mother share price has went up to $1.62, which I took the chance to divest at this point. This is equivalent to about $1.70 before the announcement of the rights and the enlarged base.

Projected yield is at around 5.8% yield based on current development which I deemed it as fair to slightly expensive if we are talking about Hospitality Reits in general.

Part of the other reason is I am reallocating this capital to build up a much larger position in Comfortdelgro and M1 - my favorite contrarian play and get into the action when everyone else is avoiding them like a plague.

The share price should also see some more turbulence during the nil paid rights session starting next Monday as people starts to arbitrage on it.

*Still Vested with 10,000 mother shares, and entitled to 12,000 renouncable rights

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22 comments:

  1. Hi B, curious - are you/have you gone more into CDG?

    ReplyDelete
    Replies
    1. Hi Anonymous

      Yes, I'll update about it more in my next transaction update.

      Delete
  2. M1 today drop to $2.10, do you anticipated M1 can eventually sell off?

    ReplyDelete
    Replies
    1. Hi Anonymous

      My personal take is eventually yes. I think bottoming out in process and they cannot go too cheap else the bid will come.

      Delete
    2. Hi!

      Sorry I'm a noob for asking this question but what do you mean by "they cannot go too cheap else the bid will come."?

      Delete
    3. Hi Anonymous

      I am referring to the M1. If they become very cheap, potential buyers would get interested to bid the M1 network which I think is very attractive to outside parties.

      Delete
    4. Thanks for the quick clarification! I've enjoyed reading your blog so keep your articles coming. :)

      On the topic of M1, would you be able to share why you take a contrarian view? The company seems to be facing many challenges now and in the future.

      Delete
  3. Hi B,
    Congratulation ! for the 28% of return in 6 months period !!
    Hope your ( our ) investment in ComfortDelGro turn out to be right ....of course nobody know the outcome in the long run ,,,but being " contrarian" could be "lonely" sometimes ... hahaha :-)

    Cheers !!

    ReplyDelete
    Replies
    1. Thanks STE :)

      Indeed a lonely process but one that I enjoy much away from the noises haha

      Delete
  4. Huart ah!! Great courage. You are not alone. I'll buy up on CDG and M1 too. What do you think of giving a target price for your open positions? It would be interesting to cross reference FA and TA too.

    ReplyDelete
    Replies
    1. Hi Anonymous

      I dont have a target price and dont intend to buy or sell at specific tp but play along the range where I feel the reward tilted towards the higher side.

      Delete
  5. you are turning out to the man with the midas touch. :) wonder whats your next entry price for CDG?

    ReplyDelete
    Replies
    1. Hi Jalan Jalan

      I have a queue at $2.20 set from last week, maybe it hits anytime soon.

      Delete
  6. Hi, Sir
    Did not your new buy ie divestment into CDG after selling CHDH? Will you update us soon. Enjoy reading your blog. Thanks a lot for sharing.

    ReplyDelete
    Replies
    1. Hi Sunny

      I have a few buys into CDG already which I will update in my next portfolio update.

      Delete
  7. Hi there, thanks for sharing your investment details! I'm just wondering what do you think of ascendas at 2.5plus?

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    Replies
    1. Hi Lynn

      Generally it's on the higher side of valuation for me.

      Delete
  8. Hi
    I am also shifting some of my fund to comfort Delgro
    And ipo for netlink

    To ask about the subscription of the right of CDL H trust
    Can we do through ATM? Also do we need to fill in the form which I just receive today
    I am entitled to 2000 shares

    Sorry. I am first time for this right subscription.
    Thank you

    ReplyDelete
    Replies
    1. Hi Yeh

      Yes you can already start subscribing to your entitlement from the atm right now. They will also ask if you want to apply excess. :)

      Delete
  9. Hi sir

    I have a newbie question.

    I received today that i am entitled to 3000 rights shares. I have sold off all the mother shares after it went ex rights. If i choose to do nothing i.e. don't apply through atm or submit the form, what will happen? Will they auto sell this 3000 rights shares to me and deduct my bank acc of 3000x$1.28? Or nothing will happen i.e. the rights share just expired? Thank you.

    ReplyDelete
    Replies
    1. Hi John

      The rights will just expired.

      You need to apply or you can just sell your entitled rights on the market right now.

      Delete
  10. Hi, I have a newbie question too.
    How to sell our entitled rights on the market now since we have yet to apply at the ATM??

    ReplyDelete

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