I have some and will be buying some more. Once I get a certain amount I'll be using the dividends to buy other stocks. I've been trying to figure out how long-term viable WRK is, particularly the dividend and the stock price. I have WRK in my TFSA and RRSP so I don't have to worry about the tax implications of RoC. WRK does not currently meet the 2011 REIT rules but they've said they plan to be.
I am curious what the more experienced members here think of WRK. The information here and on the various blogs has been very helpful in my investment education.
REITinvestor.ca lowers target and remains cautious on Whiterock REIT with a neutral #3 Ranking.
REITinvestor.ca, a private subscriber-based independent rating & ranking service, has maintained its neutral #3 ranking of WRK.UN, and today lowered its target price to $14.00 from $16.00
Today Whiterock REIT announced that it has entered into an agreement with a syndicate of underwriters who will purchase 680,000 units at $14.80 per unit with total proceeds of approximately $10M. The syndicate has an additional 10% over allotment option for 30 days following the expected closing in mid May. Whiterock intends to use the proceeds for debt repayment and other trust purposes.
REITinvestor.ca estimates that while the $10M if applied to reduce bank indebtedness would increase short-term liquidity, there remains a real risk that distributions will need to be cut by 25% -50% within the next 24 months as payout well exceeds distributable income.. REITinvestor.ca is of the opinion that the current unit distribution is unsustainable at $3.366/an.
With current yield is excess of 22% at today trading price of $15/ unit. REITinvestor.ca does not see much upside to the units at the present time despite the high yield.
REITinvestor.ca also notes that over the next 3 years, Whiterock REIT has $55M in convertible debentures coming due all with low interest rates and convertible at $10.20 - $13.75.
WRK.UN units closed on April 22 at $16.00 per unit on the TSX. For more information, visit REITinvestor.ca.
DISCLOSURE: REITinvestor.ca maintains its own investment fund and has not position in WRK.UN.
REITinvestor.ca does not provide investment advice nor does it recommend the purchase or sale of securities, including any REIT units it covers. Please consult your personal professional advisor before investing.
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