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CPA - Commonwealth Property Office Fund

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It is like trying to kill a snake. The bloody thing keeps moving agressively upward when you least expect it. Coming off a low of $1.035, cpa slithered up to a fresh high of $1.08 before dropping back to $1.055.



All week it has met support at the $1.055 level but the interday highs are getting lower. This wouldn't be a bad time for the break-out experts to chime and with their opinions as to whether cpa can hold this point and go higher or is about to crash downwards. I have a low ball bid in the queue just in case but I'm not confident. As always do your own research and good luck .
 
cpa turned south this week and the break-out went the wrong way. Seems the drive from investors seeking security from yield may have fizzled out almost as soon as it began. There is a lot of negative press at the moment in respect of Australian property price bubbles etc and the Office environment is very competetive as the market rejigs for the upcomming Barangaroo development in Sydney harbour. Some see it as an oversupply of office space, others see it as an opportunity for more businesses to relocate into the Sydney CBD from outer suburbs. Time will tell.



If cpa doesn't bounce from here, the next support level is $1.01 then $0.98(?)
 
This week cpa rebounded from support at $1.03 and restested $1.06 before fading to end the week at $1.045.



The two (2) year chart shows cpa steadily climbing since December 2010. The share price tracked sideways between $0.87 and $0.96 until December 2011 when the resistance level of $0.96 appears to have become a support level. Now cpa appears to be narrowing the gap to NTA in a similar manner to most other aussie reit's.

I think it is worth noting that cpa draws income mainly from office rentals and doesn't have the exposure to retail and residential property development of some of the other major reit's. None-the-less security of good yields can only be sustained if income increases in line with the share price. It may be hard for cpa to generate increasing income while the economy is dawdling and there is a need to provide incentives to retain tennants. As always do your own research and good luck.
 
[tr] [td] Share: [/td][td] CPA [/td][/tr]
[tr] [td] [/td][td] [/td][/tr]
[tr] [td] Date: [/td][td] 7-09-2012 [/td][/tr]
[tr] [td] [/td][td] [/td][/tr]
[tr] [td] Closing Price [/td][td] 1.045 [/td][/tr]
[tr] [td] Issued Shares [/td][td] 2,347,003,413 [/td][/tr]
[tr] [td] Capital [/td][td] 2,452,618,567 [/td][/tr]
[tr] [td] Earnings $ [/td][td] 0.1066 [/td][/tr]
[tr] [td] Dist $ [/td][td] 0.0609 [/td][/tr]
[tr] [td] Yield % [/td][td] 5.83% [/td][/tr]
[tr] [td] P/E [/td][td] 9.80 [/td][/tr]
[tr] [td] NTA $ [/td][td] 1.16 [/td][/tr]
[tr] [td] Discount to NTA [/td][td] 9.91% [/td][/tr]

[td]
[/tr]

Disclaimer: The above figures may have errors and should not be relied upon for the making of investments decisions. As always do your own research and good luck.
 
Hopefully $1.02 will be a support level. This hasn't been a good week, so far, for cpa. It looked like there would be a recovery to the $1.045 - $1.05 area today but the sellers into the auction had other ideas.



Larger volumes too but probably inflated by the options settlements today.
 
Well $1.02 - $1.025 has proven to be a support level this week but $1.055 is also proving to be a resistance level. The spread today was totally unexpected. Opening strongly (for the week) at $1.05, touching $1.055 then crashng down through to $1.025, then rebounding to $1.05 before collapsing in the close to $1.035



A little disapointing, unless you were buying in the $1.025 - $1.03 range and bailing in the $1.045 - $1.05 range. Unfortunately, for me, my order at $1.025 did not get filled. Maybe next week?
 

Not sure why but quite a few REITs closed at daily lows... CFX, GPT, CPA and MGR. I think there was a bit of quarter end events going on (sector rotation or may be related to option expiry).

Managed to make a good trade on long CPA short CFX, but my long GPT short ALZ is treading water.
 

Most of them appear to be in a consolidation phase after the recent surge. Not quite retreating to previous ranges but looking to establish newer support levels.
 
A good week for CPA. The lows are getting lower and the highs are getting higher. The RBA interest rate cut on tuesday certainly helped the Australian REIT sector and CPA was swept up in the euphoria. Volumes were good and there is a suggestion that overseas investors are taking more interest in our reit's, particularly when the aud$ dips against the US$.

Six Month Chart


Three year chart



The yield rate is still good (probably better now that the banks will likely trim interest rates on deposits) and the Price/Earnings ratio is one of the lowest of the reit's.

Share: CPA
Date: Closing 5-10-12
Closing Price 1.06
Issued Shares 2,347,003,413
Capital 2,487,823,618
Earnings $ 0.1066
Dist $ 0.0609
Yield % 5.75%
P/E 9.94
NTA $ 1.16
Discount to NTA 8.62%

[/tr]


As always D.Y.O.R and good luck
 
Opps...I was in a hurry and I did a Hilary Clinton, I miss spoke. I posted "The lows are getting lower and the highs are getting higher". I should have said "The lows are getting higher and the highs are getting higher. Humble apologies .
 
Naturally my sit in the queue at $1.03 has proven to be extremely optimistic and the low aud$ has encouraged overseas investors to jump on board helping the local investors seeking security in yield push the price up to todays close of $1.095 (same as yesterday). Looks like I well and truly missed this opportunity.



The interesting part of todays trading, on reasonable volumes, was the push of cpa to $1.12 early in the days trading. At only $0.04c off the nta value of $1.16, even at $1.12 the tables show cpa still has potential to be a good investment on the technicals of yield, price earnings ratio and discount to nta.

Share: CPA CPA CPA
Interday High
Date: 12-Oct-12 16-Oct-12 16-Oct-12
Closing Price $ 1.08 1.095 1.12
Issued Shares 2,347,003,413 2,347,003,413 2,347,003,413
Capital $ 2,534,763,686 2,569,968,737 2,628,643,823
Earnings $ 0.1066 0.1066 0.1066
Dist $ 0.0609 0.0609 0.0609
Yield % 5.64% 5.56% 5.44%
P/E ratio 10.13 10.27 10.51
NTA $ 1.16 1.16 1.16
Discount to NTA 6.90% 5.60% 3.45%

Then again....D.Y.O.R and good luck.
 
What a week. CPA rocketed up to $1.125, kicking away from the previous level of resistance at $1.075 and lobbed within $0.035 cents of the nta of $1.16 before faltering and dropping back to finish the week at $1.085, up $0.005 on the previous week . CPA is now trading with a yield of 5.61% and a discount to nta of 6.47% but the price earnings ratio is only 10.18 which compares very favourably with other Australian REIT's that have price earnings greater than 17.



With annual earnings above 10c per share and a distribution of just over 6c per share, cpa has room to increase the disribution amount per share improving the yield rate which, in my opinion, would encourage more investors and probably push the share price higher into the price earnings range of 15+ . Then again what would I know. As always do your own research and good luck.
 
It has been an interesting week in the reit arena. A flurry of support followed by a flurry of sell off's. Naturally cpa went along for the ride. Once again rallying away from the $1.08 area to retest the $1.115 upper ranges then fading on Friday to close out the week at $1.08.



While cpa finished off the week better than it has in the past two weeks, it remains to be seen whether the $1.075 - $1.085 can become a support level and move higher or whether this is pre-election euphoria and things are about to crash back to reality in November, post election. As always D.Y.O.R and good luck.
 
An interesting week for CPA. Closed on $1.035 (after touching $1.03) approximately 6.7% down from the recent high closing price of $1.11. The drop seems to be the impact of the property devaluationof 10 Shelly St Sydney which was revalued downwards because KPMG is moving out in January 2016 (3 years from now). This has caused the nta for cpa to be reduced from $1.16 per share to $1.15 per share.

No doubt other factors impacted on the share price. It is likely that the hurricane in the U.S will cause the withdrawal of funds back to the U.S from the Australian market. However in my opinion the price slump is excessive when compared with the rest of the market.



The next support levels, if it doesn't rebound from here, appear to be the $1.03 - $1.02 levels. If the share price doesn't hold there the slippery dip could continue to $1.00 or even $0.98?

With the distribution being maintained at $0.064 per annum (a dividend of approximately $0.032 can be expected in December 2012) this equates to an annual yield of 6.18% at the closing price of $1.035. As always d.y.o.r and good luck.
 
Bounced off $1.025 with strong support at $1.03 to rally and close on $1.045 for the last three (3) days running. Touched $1.05 today with good demand/volume before fading into the auction to close out the week at $1.045.

At appears that when there is uncertainty (Europe, U.S.A, slowing China?) there is a transition to sound stocks with good yields. CPA with a yield at 5.83%, a discount to NTA of 9.13% and trading at a price earnings ratio of only 9.8 seems to tick a few of the right boxes garnering good support in the mid to later part of the week, compared to some of the other reits trading at higher price earnings ratios.



It will be interesting to see if cpa can retest the recent resistance/support level of $1.075 in the near future. I expect it will be bolster support with the forthcoming dividend unless of course the fear factor goes nuclear. As always do your own research and good luck.

Share: CPA
Date: Closing 9-11-12
Closing Price $1.045
Issued Shares 2,347,003,413
Capital 2,452,618,567
Earnings $ 0.1066
Dist $ 0.0609
Yield % 5.83%
P/E 9.80
NTA $ 1.15
Discount to NTA 9.13%

Disclaimer: No guarantees given that the above figures are accurate. Additionaly they should not be relied upon for making financial decisions. D.Y.O.R.
 
After holding up all of last week arround the $1.035 - $1.04, cpa collapsed in the close of Friday 16/11/12 to a new recent low of $1.015. Watching the days action, the sell down in the auction appeared a little brutal. Up until 4:00pm, cpa had turned over approximately 2.1 million shares with the price dipping from $1.035 to $1.02 in the dying stages of the days trade. The auction saw a further 2.6 million shares trade with the price pushed down to the days low of $1.015.



Todays rebound to $1.03 on good volume was very welcome (I hold). Now all cpa needs to do is go back above $1.08. As always d.y.o.r. and good luck.
 
In a week where the Greek bailout struggled to get across the line, American's took time out to celibrate Thanksgiving, China elected a new leader and the U.S debt ceiling came to prominence post election, cpa basically went nowhere.



Except that as the AUD$ rallied, where a lot of other A-REIT's were being sold down, cpa continued to find support at the $1.02 - $1.03 area. Unfortunately resistance was encountered at the $1.045 - $1.05 area making it a very tight trade for those brave enough to venture in. I'm in but will hold for a combo trade and div if cpa can't rally past the $1.08 level prior to going ex-div in December. As always Do Your Own Research and good luck.
 
I find it a little odd that the rest of the xao is rallying but reit's are being sold off, going against the overall trend. A few weeks back reit's were the "fall back" darling as shareholders sought out the security of yield and long term prospects. In my humble opinion it is highly unlikely that investors have suddenly developed an appetite for risk and are venturing back to "growth" shares versus holding onto yield shares. If any thing the trend is still toward "yield" shares like banks, telstra and a few others although daily volumes are well down.



CPA seems to be swinging between $1.02 and $1.045, finding moderate volumes and support at $1.02 - $1.03 but encountering resistance at $1.04 - $1.045. Almost as if it is being contained here while someone accumulates? The yield at this price is better than bank rates and the assets are good. Further, their long term funding costs are low and their gearing is low also. Sometime the market loves you and other times it give you the cold shoulder. Good luck and d.y.o.r.
 
It appears that the market has moved beyond giving CPA the cold shoulder to applying an artic freeze to the family jewels. In recent weeks the CPA share price has tumbled from newish highs of $1.12 to test the lows of $1.015 - $1.02 then struggling to rally to resistance at $1.045 - $1.05. On thursday the A-REIT sector turned feral sending CPA down to test $0.9925. The volumes came in before close lifting the price back up to $1.005 and CPA was dragged up a further $0.03 on friday as the rest of the REIT sector took part in the ASX rally.

The recent picture for CPA is not pretty. In fact the highs have been getting lower and the lows are also getting lower.




While it looks like CPA is finding support at these levels, the volumes are good, the RSI chart tells a different story. The moving average has been dragged down so much that it shows CPA is not oversold at these levels and would move into the overbought levels if it were to improve above $1.035.



However, in my opinion the fundamentals for CPA are better than many of the other A-REITs'. A Return on Equity of 10%, a yield of 5.88%, a low price/earnings ratio of 9.71 and trading at a discount to NTA of 10%. Better returns than bank interest rates for your millions and almost as secure. CPA has a good porfolio of properties, good occupancy levels, is relatively cashed up from last years divestments that were not fully expended in the off-market and on-market share buy backs and is due to announce a distribution on/or about 21 December 2012 which should be approximately $0.032c per unit.


Share: CPA
Date: Closing 07-12-12
Closing Price 1.035
Issued Shares 2,347,003,413
Capital 2,429,148,532
Earnings $ 0.1066
ROE 10.30%
Dist $ 0.0609
Yield % 5.88%
P/E 9.71
NTA $ 1.15
Discount to NTA 10.00%


So why has the market seemingly turned CPA out into the cold? I hold CPA, bought and held when it dropped to $1.03 and didn't have any more funds to top up when it dropped to $0.995. As I've said before, the market is a fickle lover. However trading rule number one (1) is: The market is never wrong; and trading rule number two (2) is: When the market is wrong, refer to rule number one (1).

Personally I think the market has got it wrong atm and I'm going to hang in there, at least until it gets it right again or I decide to admit I am wrong and take steps to stop being wrong. As always do your own research and good luck .
 
On the good side of things the highs have gotten higher and the lows are also getting higher. On the downside the share price seems to have run into resistance at $1.06. Also there seems to be a relationship between the Australian $ and the reit sectors. I have noticed recently that when the aud$ goes up, there is a corresponding sell down of A-REIT's. Recently the aud$ has been going up against the us$.



CPA seems to have lost its' gloss in recent weeks and has struggled to recover when compared with the likes of dxs, gpt, iof and a few others. We will have to wait and see what happens in the next week when it goes exdiv and then whether or not there is a christmas rally. Good luck and as always, do your own research.
 
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