APTT

APTT: Stock in freefall since 3Q15 results release. It has declined 19.5% since 6 Nov.

While 3Q15 results were in line, investors might be punishing the counter on its high debt loads. Its net gearing as at 3Q15 is 0.93x while its interest coverage ratio stood at 2.9x.

Also worthy to note is that its Earnings per cent stood at 1.01 cents/unit while it paid out 2cents/unit.

While APTT has maintained its guidance to distribute the same amount of cash as it did in 2014, there are questions about how the trust would raise the funds given that earnings have underperformed vis-a-vis last year.

APTT has only $52.8m in cash reserves, implying the need to raise funds through debt or equity to keep up with the payout.

Counter has 3 buys, 3 hold calls with TP of 0.86.