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Well those spread bet short have until 12:30 today to decide what they are going to do before they get locked in.
Clean bill of health then it should open much much higher.
Assuming BDO find nothing of concern then the SP should rise significantly. Whether or not it will triple is questionable but it could well double over a relatively short period of time. However, if BDO find a significant issue or two re for example over-valuations, "dodgy" related party transactions, missed liabilities or non compliance with REIT rules then the share may not come out of suspension(which will happen at the end of tomorrow) and you'll end up locked in to an investment which has fallen in value. Simplistically I think this is a double or quits type of bet and it is a bet and not an investment due to the lack of information and transparency. Good luck whatever you do. I've lost money on this in the past and I'm not willing to lose any more on this company when there are many better prospects.
I did a bit of reasearch on home reit and this is what i found..
What we know is @ 13th September 2022 when they announced acquiring "158 PROPERTIES FOR £57.4M"
We know they have a total of 2,308 properties providing 11,131 beds.
Which means they paid £398,137 on average per property with 4.83 average beds per property.
If every bed were to get £95 per week the total gross rent would be £55 million if there were no defaults.
With a current Market cap of circa £300 million we know HOME REIT has acquired at cost £918.9 million pounds worth of property and it has debt of £250 million on long term deals > 10 years paying interest of no more than 2.5%
based on all previous RNS they will have over £100 million in the bank @ 13th September.
With a 5.5p dividend paid per year (1.38p per quarter) on a 40p share price that is a yield of 13.75%
On the assumption BDO sign of the audit the share price could triple? Am I wrong?
Thanks megacycle for a detailed response which raises a lot of very good points which I tend to agree with. My conclusion is that this is a very risky investment and with suspension looming I'd rather keep my free funds for investment elsewhere and leave this one well alone. Whilst the SP has risen today I expect it to fall when it goes ex div tomorrow and to continue to fall as the date of suspension- effectively a week on Friday approaches, with only a few days for those who wish to get out to sell.
GLA
It's certainly a risky one. The question here is whether the tenants are really fully funded and will remain solvent. Most seem to be recently formed CIC companies with only a minority visibly backed by Local Authorties. Are these CIC's covering their operating costs plus the rent? Looking across at Civitas Social Housing they have had few defaults in their 6 years of operation so maybe the picture is ok. What we dont have is much information on tenant covenants for Home. The valuation of Social Housing is (or ought to be ) non-standard and it seems to me that one other vital piece of knowledge is the alternative use value of the underlying bricks and mortar? If the tenant defaults can these properties be sold into the normal resi. market without any fresh planning consent and what discount if any applies to allow for potential conversion costs back to saleable resi value? As far as the enhanced audit is concerned I am rather baffled by this phrase? What material areas of the accounts have not been subject to an adequate audit already? If there is a need to spend up to 2 months reviewing work already performed and identifying and rectifying any glaring gaps in the audit quality it suggests must be something amiss with the original audit (which does not mean to say the numbers are not right). Although it might cost a bit if I was the FD I would have instigated a peer review by a top 4 firm for the audit/draft numbers and also the same for the valuers report. I would also expect rather more depth to the company;s rebuttal of the allegations which strike me as hastily put together and lacking detail. The fact that we are where we are does add weight to the actions to strengthen the board which have been taken already . The validity of existing board appointments also has to be questioned. I am not a holder nor have any axe to grind just interested in any potential upside post suspension but even though that might be 50% or more I think there are better places to earn a high yield from quality assets at the moment
I take no faith whatsoever in any action of an auditor. There’s a reason why they are fined continuously - it wouldn’t surprise me if they barely even audited the numbers and are beginning their work from scratch.
Thanks ILTS- I think you're right and that the choice is between not buying and buying and holding through the period of suspension, depending upon your view as to what the ultimate position is found to be. Disappointing in my view that BDO can't complete their audit work before the end of December and thus avoid the shares being suspended- after all they'd originally been happy to disclose the audited results on 28 November which is now over 3 weeks ago- couldn't they have completed their additional work in this period by now enabling the audited results to be released this week and taking away the uncertainty? Giving a date of 31 Jan to complete the audit suggests that they know that there are a few problems here. Anyway I've decided not to invest in Home again and wish you and all LTHs the best of luck here.
Justthisonce, seems like a strange play to me. The share price is bound to drop by the div amount and there will be lots of volatility. I’m personally holding to suspension in the hope that everything gets cleared up and I make a tidy profit on readmission. We’ll see how it plays out!
Home's dividend on Thurs offers a 4% return on the current SP so is it worth buying tomorrow and potentially selling before it gets suspended at the end of this month? Any views are welcome as I'm really undecided- I owned shares in Home in the past and lost money and it would be nice to recover something but it does appear to be risky with a lot of issues hanging over it.
I would have thought the SP would stabilise now that the major shorter is closing their position. Seems not.
The BoD still seem very adamant that the audited books will show that it has all been nonsense
This year's dividend with the drastic fall in SP represents over 10% especially if claims against the company are found to be largely unfounded. I bought a modest stake and am 25% down but may come good after audit late January
No HH, but I have spent some time working with Llama's in Delhi
Thank you i bought yesterday and took a hit of 250.00 end of day bought again this morning recovered my loss im out now not sure if this is a share for me thank you
you bought lower end of the spread, to feel like you got a good deal (making it a sell) as someone SOLD cheaply to get rid of the shares
no I bought 23129 shows as sell 38.5 and the the others at same time all buys but sells
what are you seeing? the late reported sell trades from yesterday?
Why all large buys being shown as sells that's not right to do that
I don't own any of these and I doubt I ever will, but it wouldn't surprise me if the shorts close before any suspension of trading. Being stuck short and facing gap risk after some internal issues are resolved doesn't sound like fun. They've got big profits here and I think they'll cash them in.
Auto bots still buying. Think I will wait until nearer to xd date to average down.
Bod have a lot to answer.
Blackrock are dirty, they did the same to THG. Which has still never recovered. This is going to take some time as they try and find the volume to take their shares and eventually will just end up a lot of people getting trapped at these high prices and then the audited reports will show after all that HOME have been profiteering off people cant afford the rents. Not a good look.
Oh well that changes everything, if Blackrock are selling down at the same time as the shorters are shorting, thats 25% to churn through. Going to be a long bumpy ride..
Per the latest TR1 I can see for M&G (25/11/22), they have no shares out on loan.
BlackRock (TR1 dated 8/12 was cancelled 9/12 and reverted to the 11/10/22 TR1 - confused yet?) have 9.91% of the company held and 1.99% lent out, totalling 11.9%. The cancelled TR1 increased the leant out shares to 2.86% and the total holding to 12.05% .
Thats the thing, they still have 15% available to lend out...and been nowhere near enough volume to have completed the sell down. We will start to see over the next few days if declared shorts picks up.
I can only see 2.95% shorted. Do you have the link showing 15%?