I encourage you all to do the homework and look into the Timbercorp Primary Infrastructure Fund (ASX code: "TPF")
The stock trades as a land and water asset fund, which basically owns the land and water entitlements subject to some of TIM's almond plantations.
In effect, Timbercorp pays the fund its lease yields, which are secured for 22 years (or the life of the almond projects).
Investors in return receive strong cash distributions (approximately 9.8cents per annum, part of which is tax deferred).
In addition to the strong yield TPF is paying, investors participate in the upside to any increase in land value and water entitlements.
The current NTA of the fund is $1.12, yet the shares trade at a massive discount (currently around $1.03).
I have spoken with very senior management from Timbercorp, and they have commented that the water entitlements have not been valued to their current market value (which would be about 50% to 100%) to Fund value. This would add about another 8 to 12 cents worth of NTA on my calculations.
The Fund will be revalued at the end of the year, and one could expect about another 5% uplift on land value (or 5.5cents).
At current prices, it trades at a discount to NTA, and is offering a yield of over 9% pa (excluding additional tax deferral benefits).
Definitely worth a look.
I hold.
PS - This is not a trading stock. It is one for the super fund, or the bottom drawer.
TIM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
