Q: I did not expect this REIT to reach such a low price, since I did not find news or results that would justifie this " nonstop" sliding .At a 25% loss on paper , I wish to sell this REIT if there were significant longer term risks , even at this very low valuation (in order to use the loss vs capital gains ), but I would keep this REIT if it was "still" considered as a solid Cie financially with safe dividends . Could you please weight "pros and cons" in this context ..
5i Research Answer:
CAR.UN was a stellar perfomer for years, and this gave it a premium valuation. But missed numbers (four of the past eight quarters) and concern over the Canadian economy and our declining population have hurt the units. It is now 13x cash flow, cheaper by historical standards but in-line with many peers. The first quarter results were OK. Payout ratio is quite reasonable at 65%. The balance sheet is better than peers. We would consider it a HOLD. Any replacement will likely have the same macro influences. We would be fully comfortable with a tax loss/re-buy plan. It is not the type of security that moves a lot, so a tax loss can be utilized without giant risk of a spike in the unit price.