Short ‘n Sweet – A-REITs and Dominos

Editorial director of Switzer
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It was a hard market to play in June. The S&P/ASX 200 accumulation index fell by 1.5%. On a positive note, the index ended the financial year up 17.43%. The Midcap 50 i.e. the smaller 50 companies of the ASX 100, outshone its larger counterparts for the financial year, ending up 20.8%.

Property power

A-REITs were one of only two sectors (the other being Utilities up 0.9%) that ended June higher. Property trusts rose 3.3% over the month.

James Dunn wrote about A-REITs just over a week ago. One of the metrics he looked at was discount to analysts consensus target price. The Astro Japan Property Trust (AJA) had the largest discount to target price at 14.5% and its share price has risen considerably over the past week.

“To be comfortable investing in Astro Japan Property Trust you have to have a confident view on Japanese property: JP Morgan, for one, has such a view, placing a recent “overweight” recommendation on AJA,” Dunn said.

Astro Japan Property Trust (AJA)


Another REIT that Peter called out in May was the National Storage REIT. It has had a good run since it listed last year and small cap manager Eley Griffiths started buying the company earlier this year too.

“National Storage is able to offer Australia-wide choice to the customer base and able to tweak facility yields, via a dynamic pricing tool, that permits storage rate movement up/down depending on available supply,” Eley Griffiths co-founder Ben Griffiths said.

National Storage REIT (NSR)

The fast food lovers

Back in March this year, Manny Pohl, from ECP Asset Management said he liked Dominos’ Pizza because it had good capital management.

“It is a high growth business, with revenue growing annually around 8% over the past three years and return on investment above 20% over the past three years – it is very capital efficient,” he said.

It is another company that managed to push through the June malaise and has almost doubled in price over the past year.

Domino’s Pizza (DMP)


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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