I haven't had a close look at each company's gearing levels recently, but I do know that MCW is better supported in the market. What I mean by that is that if MCW SP drops, its almost guaranteed to rebound in the short term, obviously being close to EX DIV date helps too, but it always trades at a permium to AJA. This could well be due to different gearing levels as you suggested, and what instos are happy to stomach with respect to risk.
Comparing yields, AJA will trade all day (except before EX DIV date) at a SP giving 14-17% yield. Whilst MCW will trade in the 9-12% range. But like I said, its better supported, you're got a better chance of a nice swing trade if MCW drops 10-20%, than if AJA does, MCW will usually bounce back quicker, probably because Macquarie is supporting its own offspring, who knows, never looked into why, just noticed it happens, and you can make a few dollars off the swing.
I'm not that concerned about the gearing, even if AJA went belly up, which I can't see happening, I assume if trading at half its NTA it means holders shouldn't lose their money. I'm happy with the higher AJA yield even considering the higher gearing risk.
Also, I was disappointed when MCW announced its June 2009 distribution, of 3 cents, as only about 2 weeks earlier, they relseased a news letter saying it would be 4cents per share. If they had been considering cutting the distribution by 25%, thy shouldn't have advised the 4c then 3c change so close to each other. Very misleading.
Felt a bit burnt after that one, but MCW has done very well for me, I bought my first parcel at 11c earlier this year, and its been over 70c not that long ago, 700% return in 6 or so months, cant complain. I didn't get the whole return, as I was trading in and out of it, missed some of the run. Sometimes buy and hold is the go.
Another thing to consider it tax and DRP's, AJA has suspended their DRP, I haven't checked if MCW is opearting one. Might be a small influencing factor given the divvies aren't franked.
Good luck boys.
MCW Price at posting:
59.5¢ Sentiment: None Disclosure: Not Held
