Question of the Week

Outlook for Newcrest and Dexus Property Group

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Question: My financial advisor has recommended I add some Dexus Property Group to my SMSF. What are your thoughts on this investment please?

Answer (By Paul Rickard): I quite like Dexus Property – it is in my high-income portfolio and has done pretty well, up almost 11% this calendar year.

At its current price of $1.11, it is probably a touch expensive (the NTA at 31 March was $1.06, with gearing at 34.6%).

According to FN Arena, broker sentiment is positive at +0.4 (scale -1.0 most negative, +1.0 most positive), and the target price is $1.13. Forecast distribution is 6.26c per unit – a yield of 5.6% on a price of $1.11.

I wouldn’t be rushing to pay up for the stock – however, at the right price, I think it could add some value to a portfolio.

Question 2: Does your expert panel have any comment on Newcrest mining? I have some shares and have been sitting at a loss for a while and wondering if there is any upside to NCM or the gold price.

Answer 2 (By Paul Rickard): To be honest, I cannot get excited about the gold price (I am a gold bear), or Newcrest for that matter.

As for the brokers, according to FN Arena, the consensus target price is currently $10.31 – very close to where NCM is currently trading. Sentiment is negative at -0.3, on a scale where -1.0 is most negative, +1.0 is most positive.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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