Q: Hi 5i - what’s your take on HR.UNs recent update? Would you suggest continuing to hold or dump it now?
Thanks, Neil
Thanks, Neil
5i Research Answer:
Investors were disapppointed there was no sale of the company, but it looks attractive on valuation. At only 8X cash flow, with a 6% dividend, and a payout ratio of 65%, we think the stock still has potential from current levels. Lower interest rates should help both its interest coverage and sentiment towards the sector. There is size risk here, but we do not think this is a 'get out' scenario after the stock decline. It remains up for the year and occupancy at 95.3% is solid.