This is a continued trilogy event for CDL Hospitality Trust
which I have previously wrote here
Today, I managed to divest
the majority of my mother share for 50,000 shares at $1.62
in the open market. This is after the shares have went ex-rights on Monday, so I am pretty surprised at their strong performance in the market today.
The divestment yields me a decent 28% gains (inclusive of dividends) for a period of about 6 months. This has been my top position since the start of the year and I am fortunate to be holding it as this is the top performing Reits in 2017 from the hospitality comeback.
The original share price was $1.68 before they announced the acquisitions and the rights issue that day. The TERP works out to be at [(1.68 x 997,728,705) + (1.28 x 199,545,741)] / (997,728,705 + 199,545,741) = $1.61
The share price then went on a few turbulence as the market absorbs the news and fall to last Friday closing at $1.655.
Based on the last Friday closing of $1.655, the revised TERP is [(1.655 x 997,728,705) + (1.28 x 199,545,741)] / (997,728,705 + 199,545,741) = $1.5925.
Today, the mother share price has went up to $1.62, which I took the chance to divest at this point. This is equivalent to about $1.70 before the announcement of the rights and the enlarged base.
Projected yield is at around 5.8% yield based on current development which I deemed it as fair to slightly expensive if we are talking about Hospitality Reits in general.
Part of the other reason is I am reallocating this capital to build up a much larger position in Comfortdelgro and M1 – my favorite contrarian play and get into the action when everyone else is avoiding them like a plague.
The share price should also see some more turbulence during the nil paid rights session starting next Monday as people starts to arbitrage on it.
*Still Vested with 10,000 mother shares, and entitled to 12,000 renouncable rights
Thanks for reading.