Q: Can you update your thoughts on FRU?
5i Research Answer:
FRU has seen negative momentum recently and has declined ~19% on a year-to-date basis. It continues to pay a nice yield of 8.4% and trades at a cheap valuation of 8.1X forward earnings. With the price of oil sliding over the past few months, we expect this name to continue to see downward pressure. Its historical sales growth has been mixed, but it generates free cash flow and can sufficiently service its distributions and debt. We would be comfortable owning it for income, but we might not expect much in the way of capital appreciation over the near term.