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Skamvougeras: Property trusts at "extreme valuations"

Livewire Equities

Livewire

Perpetual’s Head of Equities Paul Skamvougeras thinks bond-proxies, including REITs and infrastructure stocks, are looking overpriced. "People are looking at the spot interest rates and valuing some of these companies. We think you need to take a through-the-cycle approach - that yields a different result when you look at the valuations. If you look at property trusts in particular, they're all trading 30-50% above their NTAs. They're extreme valuations. If you look at something like Transurban; highly-geared vehicles, had all the tailwinds of low interest rates, but not pricing in any prospect of interest rates ever being any higher. Transurban is geared at 8x debt to EBITDA and delivers roughly a 4% distribution. Is that enough for the financial leverage within that vehicle? We don't think that's enough." In the video below, he looks at one stock that he likes following reporting season, and shares his views on the banks. (Discussion of bond-proxies starts at 6:32)


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