If we use div yields as a proxy to pricing income type shares like MCW, historically it has paid out consistently 7.5-9.5% (and on average 1-3% above the cash rate) over the years up until the fall out last year. With the fall in SP by 80-90% to mid 20s yet div forecast "slashed" by half to 8c the current yield is still a very attractive +30%. Let's say we go more conservative and price risk to minimum 15% div yield and a 10% differential over cash rate there is still potentially a move to +50 cents for MCW. Don't forget too, there is commercial property and there is commercial property. You cannot compare the security and serviceability of 10-25 year supermarket leases against the fickle nature of 3-5 year gift/clothing shop leases. Only if WOW chart is falling like a rock should you be concerned but then the whole world will be in trouble if that happened ...
Technicals ----------
On the daily chart expect short term resistance at low 30s as price approaches upperline of daily uptrend channel
On the weekly chart expect some resistance at high 30s as price approaches lower line of weekly downtrend channel that was broken WE 17/10 last year. If this gets taken out price could have a clear run to 60-70 range as price approaches upper line of previous weekly downtrend channel
But if Mr Dow has a bad time then of course upside will be capped until sentiment changes.
Summary -------
All in all there is much more upside to MCW than downside as because it is primarily an income share it will become too compelling for value and longer term investors to ignore when they can only get 0-5% in the bank or +15-30% on the dividends alone plus potential for capital gain.
MCW Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
