Having just updated on all the stocks in 2CHYP through the portfolio analytics uploaded earlier this week, I will instead dedicate this post to stocks that are on the cusp of being added to 2CHYP pending pricing and other factors.
Farmland Partners (FPI) is perpetually on our watchlist because its long run value is soundly above trading prices. That being said, I think there will be a wave of negative headlines breaking soon due to the weakness of the farm economy in 2018. I believe these headlines will push the price lower, allowing for a better entry point.
Plymouth Industrial (PLYM) has made a sizable recovery back toward $17 and we used this recovery to flip into STAG and/or GOOD to maintain industrial exposure. We recently toured some of PLYM’s properties in the Chicago area and were quite impressed with the way PLYM underwrites its tenants. I suspect retention rates will be quite high as PLYM has some very sticky tenants. Getting back in will depend on relative pricing between PLYM and the other industrials.
Bluerock Preferred D (BRG-D) is a high yield play in the apartment space that has high price volatility. I like to buy it when it drops to about $23.50 at the low end of its range. Over $24 presently, I am waiting for a slight pullback to get in. Note that the price volatility is unrelated to fundamentals as apartments have some of the most steady cashflows.
As 2CHYP is almost fully invested at the moment, buying new stocks will also require an opportunistic sale price for some of the names in the portfolio. In recent days, prices have been moving in the right direction, but there is still room for a bit more appreciation on the names I’m looking to dispose.