Wednesday, November 2, 2011

Stock Pick: SUNREIT (5176) An Alternative Fixed Deposit

Sunway Group or Sunway Pyramid should be a familiar name for most Malaysian. This stock provides investor a good cash flow return with good potential of price appreciation.

I compare this to AXREIT (5106) which I have missed (and sold too early). Both are better managed and well diversified in term of location and number of property. Today, AXREIT have the best premium over the NTA as compare to other 13 REITS in Malaysia. One day, SUNREIT may also have the best premium over the NTA as compare to other similar REIT in Retails and Hospitality sectors.

Since IPO in July 2010, the price has been steadily moving up with a over 10% gain, not to mention about 6% ~7% dividend.

Consider this as alternative Fixed Deposit, just keep the money away which can give you good cash flow (FD only give you interest after 365 days) but SUNREIT gives you dividend every 90 days plus price appreciation potential - e.g. AXREIT.

Despite the HUGE number of shares issue of over 2.689 billion shares, the trading volume is low. I think it is because most investor buy and keep (for the reasons I mentioned above).

More reading / reference:
MIDF Research Report dated 1.4.2011
Why you must invest in REITs