Ascendas Htrust is no Saizen Reit 2.0

After the small bet and profit on Saizen Reit, I was very tempted to have another go for Ascendas Htrust, even utilising portion of the warchest.

As there were rumours of four to five potential buyers, it did look high chance that the acquisition deal would be successful.

However, after some consideration, I decided it is no-go for Ascendas Htrust.

1. There was absolutely no margin of safety on the price for Ascendas Htrust.  When I bought Saizen Reit, it was more than 20 cents away from its NAV and gave approximately 20% margin of safety.  But Ascendas Htrust was already trading above its NAV of 70 cents (more on its NAV later) and hence no margin of safety for me.

2. I am also skeptical of the sudden re-valuation of Ascendas Htrust's NAV to 84 cents after news of the possible sales.  There is no addition to Ascendas Htrust's portfolio and the market conditions also deteriorated rather than improved for the past year.  To me, this is like when I pay for an item at a store, but the store owner tells me that I have to pay more that what is displayed on the price tag, without giving me valid reason.  I think potential buyers would also be evaluating their purchase based on 70 cents, rather than 84 cents.

3. Saizen Reit is unique and one-of-a-kind Reit, but there are other hospitality reits around.  Moreover, apart from Ascendas Htrust, all other hospitality reits are trading below their NAVs.

As such, I think there is no upside but plenty of downside if buying into Ascendas Htrust for the acquisition bet.

The takeaway from this is that one success does not lead to another success, even in more or less similar circumstances.

Really need DYODD. 

Saizen Reit

I will remember Saizen Reit fondly despite the short acquaintance with this counter.

After going XD for the special dividend this week, all assets of Saizen Reit are gone and it becomes a cash holding, though it will continue trading on the stock exchange for the time being.

I bought Saizen Reit when it was announced that there was a firm offer to acquire all the assets of the Reit.  The stock value has already crept up from $0.80+ to $0.90+.  As Saizen Reit's NAV is $1.10+, I thought it makes no sense to the owner to sell too much below the NAV.  So, I bet that it would be sold near to its NAV.

Despite my small investment in Saizen Reit, it is setting records and milestone for me:

1. The special dividend declared for Saizen Reit will be the highest one-time dividend payout that I received so far. Hope this record will be broken in the future.

2. After XD, Saizen Reit becomes the lowest priced stock in my portfolio. Hope this record will not be broken.

3. The special dividend from Saizen Reit gives a great turbocharge to my 2016 dividend projection.  The full year dividend is projected to exceed $12K for the first time in my investment journey.

I will not sell off my Saizen Reit now and will wait for the delisting cash payout.  Maybe Saizen Reit could yet surprised us with a RTO......

Saizen Reit: Welcome and Goodbye

For a long time, I have been monitoring and contemplating adding Saizen Reit to my "S" counters.  

Even though Saizen Reit is well below its NAV, it is the smallest Reit and also had an old debt default episode years ago.  So, due to my inaction and procrastination, I did not buy into Saizen Reit early enough.

I looked at Saizen Reit again when it was announced that there is a firm offer to acquire Saizen Reit.  The stock value has already crept up from $0.80+ to $0.90+.

I have not experience an acquisition before.  I was at the other side of the deal when Capitland and Keppel Corp took over CMA and Keppel Land respectively.     

As Saizen Reit's NAV is $1.13, I think it makes no sense to the owner to sell too much below the NAV.  So, I decided to buy an experience.

It was announced today that the offer acquisition price for Saizen Reit is $1.17. 

So, welcome and goodbye to Saizen Reit.  And some coffee money for my very brief acquaintance with Saizen Reit.