Opinions
Andrew Moffs
SUMMIT INDUSTRIAL INCOME REIT RCPTS
SMU.UN-T
BUY ON WEAKNESS
Jan 28, 2021
Likes it and its sector. Trade at a healthy premium. In the right markets. Growth has traditionally been there. Fairly valued today. Look for pullbacks to buy.
$13.490
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COMMENT
Focused on Canadian industrial warehouses. It's returned to its highs. However, its valuation has gotten high, so maybe take profits and add back later. There are better values in industrial spaces, though. Look at Granite REIT. Otherwise, nothing wrong with SMU.
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BUY ON WEAKNESS
Allan Tong’s Discover Picks There's a lot to like with Summit: a 3.3x PE, margins which blow away its peers, such as its 520% profit margin, and the same with its ROE of 31.32%. There are only two flags, however: Summit pays only a 2.62% dividend, the lowest in its class, and shares are currently trading at highs not seen in a decade. Still the street foresees 16% upside to $25.01. I prefer stepping in with a pullback during this current volatile market. Read 3 Best Canadian industrial REITs in 2022 for our full analysis.
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TOP PICK
The best way to play the strongest and tightest market in NA, and that's the industrial market, specifically in Montreal. Track record of creating value. Good takeout candidate at some point. Trading at a wide discount to NAV. Yield is 2.7%. (Analysts’ price target is $24.94)
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HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong occupancy rate at 99.2%. Owns 156 properties in Canada’s largest hubs. Strong revenue growth and net income. Supported by robust Canadian real estate. Unlock Premium - Try 5i Free
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TOP PICK
Best way to get exposure to industrial real estate in Canada.
Toronto and Montreal - best real estate markets in North America (increasing rent levels).
Rents going up ~35-60% percent.
Trading at discount to asset value(under valued).
Presenting good buying opportunity.
Good management team.
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SELL
Takeout offer of $23.50. Merger arbitrage, with stock trading at just below the takeout price. You have to decide if you want to take your money off the table right now, or hold out for another $1 a share. Likelihood of deal going through is quite high, already had a big boost in the share price. He'd do it now, so you can redeploy your capital into an opportunity with greater upside.
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