Let’s take a look at BROOKFIELD PROPERTY PARTNERS LP as an Investor Class trade as its dividend is attractive.
It trades on the TSX under BPY.UN and BPY on the Nasdaq.
A little background on my philosophy regarding investing or position trades.
An investor or position trader refers to an individual who holds an investment for an extended period of time, typically measured in weeks to months.
I believe in Trend Following which means that once a trend starts, it is likely to continue.
This means I try to take a position in a stock at the beginning of a trend or in an established trend across multiple timeframes.
One of the best ways to identify a trend is with moving averages.
For Investor Class Ideas, I analyze using a weekly chart using the 30-, 40-, and 50- week simple moving averages to define the trend on that timeframe.
To identify a trend, I look for the moving averages to be travelling in the same direction with the short-term moving average above the intermediate-term above the longer-term moving average.
To clarify, the 30- week MA is above the 40- week which is above the 50- week and all are advancing.
A downtrend is identified using the reverse of those considerations.
Let’s begin with the Weekly chart.
**Click on any chart to enlarge**
The weekly chart of BPY shows the price is below the declining 30-, 40- and 50- week moving averages.
This is a chart that I would typically stay away from.
Using the Investor Class Trend Following strategy described above, my ideal time to enter a long position would have been back in May-July 2014 when the moving averages were aligned and advancing.
BPY had its IPO back in March 2013.
Let’s consider the VWAP from the IPO.
The VWAP measures the average price paid per share or unit during that period of time.
The VWAP is a great indicator to measure sentiment.
If the price is above the VWAP for your time period then the average holder feels pretty good and is more likely to add to their position.
If the price is below the VWAP, then the holder is not feeling so great and is more likely to exit the position.
Let’s take a look at the VWAP on the weekly chart:
As you can see the price is below the VWAP from the IPO and the Year-to-Date (YTD) VWAP.
Since the IPO, the average holder is down 34%.
Why is the YTD VWAP important?
Most money managers are evaluated by their yearly performance. If they are down, they may sell to remove the loser from their books putting additional pressure on prices.
Let’s move down to a lower time using the Daily chart to see if there are indications of a trend change.
The Daily chart is effective at showing the bounce off the March low and how the light blue Year-to-Date (YTD) VWAP has acted as resistance.
The purple 200 Day Moving Average (DMA) is still in decline and the price is back under the 50 DMA.
My investor Class criteria require the price to be above an advancing 50- DMA and 200- DMA.
Enough of the negatives Klarenbach, what are the positives?
According to TMX Money, BPY is currently paying a 12.32% Dividend.
Not too shabby.
Can they keep it?
I have no idea.
Let’s look at some Fibonacci levels using the weekly chart.
Using the 2014 low and the 2015 high on the weekly chart, I notice that the 2020 low is near the 1.618 fib level.
This might have been an opportunity if you like to buy-the-dip and have a risk management plan.
Is the dividend attractive? Yes
Can the price go higher? Yes
When will it go higher? We have no idea.
Is there a lower risk, higher probability investment available? Yes