Thanks Chris60 for you input. The yield on your post was 5.5%, but that's against the gross value of the commercial property.
HCW is not trading anywhere near its 'gross value' adjust for debt, ie NTA.
That's why its in my portfolio.
If a commercial asset pays a 5.5% return on its asset, but that asset is selling for a 40% discount??
The intelligent investor looks at the discounted face value adjusted return on that asset, and then reflects on the risk adjusted probability of receiving that 5.5% return on the face value of the asset, knowing they are paying a 40% discount to that face value.
Is HCW a 'risk free' asset: hell no. Am I potentially compensated for that 'risk free' being no: potentially through the discount between the share price and the NTA.
Will I bet the house on it: NO.
Will I spread my risk by taking a position, but not betting the house on it: YES.
Risk adjusted returns.
I play the casino, I take numerous potential opportunities where I sense the pricing and the value of the asset are wrong.
Some will work out, some won't.
But net net the casino always wins, so long as the bets are spread.
HCW Price at posting:
96.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)