Opinions
The Monthly Gems by Allan Tong
WPT Industrial REIT
WIR.UN-T
TOP PICK
Jul 08, 2020
Though it trades in Toronto, WPT owns warehouses in the States. Basically, e-commerce stores stuff in these warehouses, and e-commerce has been roaring during this pandemic. Year-to-date, WPT inches slightly ahead of the TSX, but in the past month, the Toronto benchmark has climbed 3.3% while WPT has surged 5.5%. Analyst Andrew Moffs argues that WPT would perform even better if it wasn't trading in Canada. Despite that, he made it a top pick during the lockdown. Robert Lauzon applauds WIR's outperformance during those difficult months and continues to hold it too. Paying a near-6% dividend doesn't hurt. WIR trades at only a 6.1x PE and boasts revenue growth YOY of 25.75%. The REIT currently has six buy ratings and two holds with an average price target of $15.07, more than $2 above its current stock price. WIR is trading slightly above its 50- and 200-day moving averages.
$17.720
Stock price when the opinion was issued
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PAST TOP PICK
(A Top Pick Apr 30/20, Up 36%) Because it holds US assets, but the REIT lists in Canada, you can buy the cheapest US industrial REIT. Cap rate is 5.5%. Drop that to 5%, then this REIT is worth north of $18. They're doing the right capital allocation buying assets, yet also selling assets to partners. Likes the valuation. E-commerce will remain at current levels or rise, but not decline, so this is a major tailwind.
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BUY
He is very bullish on it. It operates solely in the US. Canadian investors don't value these stocks appropriately and US investors don't typically come north of the boarder to buy real estate exposure. He thinks we are in the early innings of the industrial warehouse cycle. They have a growing fee income stream.
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