My First Stock - Frasers Centrepoint Trust!

Finally acquire my first stock today, Frasers Centrepoint Trust (FCT)!

Does the logo looks familiar?

FCT own a number of shopping malls in Singapore - its most prized assets being Causeway Point and Northpoint.

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Why did I buy this stock?

1) It meets all the criteria I stated in the previous post - strong fundamentals, high dividends yield, and a solid blue-chip (>1 billion market cap)

2) It is a defensive stock - even in economic downturn, people will still visit shopping malls to eat and watch movies. This fits my goal of holding an income generating asset for very long term. As long as its fundamentals are good, I will hold it and collect dividends till I'm 60 years old. :P

3) It is the most defensive among all retail REITs due to its mall locations. Unlike most other REITs, FCT mall cater more to the sub-urban, heartland areas. It serves place like Woodlands, Yishun, Yew Tee - where they have sole "monopoly". It's not like Jurong East where they have 5 malls competing with each other for traffic.

4) It is something I can understand, and I can see everyday! When I pass by Causeway Point, I know how flooded the mall is. I can see how many percent of the retail areas are rented out, etc...

5) It has enjoyed very good "reviews". From the bloggers I followed to the analyst reports that I read. Most notably, It just acquired Changi City Point (at Expo) recently - which will spur its growth.

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So, that's the 5 main reasons I brought FCT.

In terms of technical, my personal valuation is this:

Disclaimer: These are based on a newbie opinon. Do not follow blindly.

P/E: 16.2	Own adjusted calculation.
NAV: $1.77	Brought it at near NAV. Ideally I would have waited for a better discount. However, I don't think it will drop any further in the short term.
Gearing: 27.6%	Extremely good. Typically REIT gearing is around 30 to 35% This means there is more than enough debt head-room.
Yield: 0.06	Not the highest among all REITs. For a retail one, it is solid. It will grow with the acquisition of CCP.
Interest Coverage Ratio: 6	Again, very good ratio. This means their earnings can cover the debt interest 6 times. Anything above 5 is good.
Estimated Margin of Safety: 43%	Based on my personal extremely conservative calculation. Ideally, I would have wanted around 67% - but you can’t have everything perfect.