2 New Seeking Alpha Posts – International REITs and a look at a highly leveraged compounder

Lately I have been writing much more for Seeking Alpha while I build up our “This Day in History” archive here on Begin to Invest. (Haven’t seen what we are working on? Here’s today’s post – October 29th – This Day in Stock Market History)

 

My latest posts are on the topics of international REITs, an asset class that I think has a lot of potential for higher returns in the future, and a post on TransDigm, a much loved stock with an incredible long term record, and why I think the good times for investors may be numbered.

More details, and links to these two articles below:

First:

International REITs are Poised to Outperform

The article looks at the composition of one ETF in particular; Vanguard’s Global ex-US Real Estate ETF (Ticker: VNQI).

Looking through the carnage has led me to find one asset class that not only has been significantly beaten down, but also has a very compelling case to be a superior investment in the next decade for both income oriented investors and total return investors.

 

Once I looked at the data, I was surprised by the significant out-performance REITs have had over international stock (and in the US too!). So seeing this ETF, with a dividend yield of 5.5%, down 20%+ caught my eye. Better still, international REITs have much more favorable fundamentals than their US counterparts.

reits

You can read the rest of the article here: International REITs are Poised to Outperform

 

 

Next article is a look at an investor favorite, TransDigm (Ticker: TDG)

Debt, Rising Rates, and TransDigm’s Business Model

The company has produced stellar returns for its investors over the last 12 years:

tdg stock price

So what could possibly stop this compounding machine?

Debt.

The company has been taking on vast amounts of debt. Now over $13 billion in total (The company has a market cap of just $17 billion, and book value of around negative $2 billion).

The annual payments needed to service that debt has been growing at a much faster rate than its revenue, cash from operations, or net income:

tdg cash vs debt

Can the company keep up? Or should investors stay clear?

You can read the rest of the article here: Debt, Rising Rates, and TransDigm’s Business Model

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