I am today reviewing RioCan REIT (TSX-REI.UN), because I own it, the annual statement (unaudited) for 2009 has just been released and the stock has had a big drop in cost. The interesting thing about the drop in price with this stock is that I cannot find any experts that are recommending a sell.
I see analysts’ recommendations from Strong Buy to Hold. The consensus recommendation is a Hold. The very first thing I love to take a look at is the Insider Buying and the Insider Selling action. 3M, but it seems to be all by one officer of the ongoing company. As I before have mentioned, people can sell for many reasons.
We are in a tough economy, and perhaps this officer of the company needs money. It might be more of a concern if there were lots of people selling, but this is not the case. The other thing is that there surely is almost no insider buying. When I look at P/E ratio, I find that it is at 32. That is high.
I get a 5-year average low of 23 and a 5-season average high of 34. Looking at these ratios, I believe that total ratios do count number. However, you do also want to look at ratios on a relative basis. This ratio is high no matter how you consider it.
The next thing I like to look is the Price/Book Value. Since the publication value is certainly going down rather than up, it is not surprising that the current price gives a P/BV that is some 15% above the long term average P/BV. This is not higher dramatically, but it is higher, which maybe gives this stock an acceptable type price, however, not a good price.
- Low-Risk Investments: 1% to 4%
- 8 years back from Utah
- Deferred payment Section 457 plan distributions
- Online display advertising
I also prefer to look at the Graham Price. Because the Graham Price is based on a formulation that requires reserve and earnings value into consideration, it isn’t surprising that the Graham Price is below the current price way. 9.83. This is over 80% below the current stock price.
The only proportion that says this stock might be at a good or sensible price is the dividend yield. The current dividend produce is 7.7% and the 5-year average is 6.8%. Therefore the dividend produce is high than average, which is an excellent indication. After having said all this, I am not selling my stock.
I would opt for the analysts that say it is a Hold. No one appears to expect this stock will do great over another year or two. Analysts appear to be thinking that the distributions will hold. As I have said, I’ll hold my stock. I really do not believe that price has been hammered to make it a really great deal enough. However, as I said at the beginning, some analysts disagree with this and think it is now a fantastic buy. I guess that only the near future shall tell who is right.
RioCan can be an equity real estate trust, which is the owner of a profile of retail properties across Canada and the northeastern USA. This blog is meant for educational purposes only and is not to provide investment advice. Prior to making any investment decision, you should always do your own research or consult an investment professional. Follow me on twitter.