6 hours Ago By The Smart Investor
Welcome to this week’s edition of top stock market highlights. Parkway Life REIT, or PLife REIT, announced a major acquisition this week. The healthcare REIT is purchasing 11 nursing homes in France from DomusVi for €112 million.
DomusVi is the third-largest aged care operator in Europe and has an extensive presence in eight countries with more than 550 facilities. This transaction will be structured as a sale and leaseback whereby DomusVi will continue to be the operator for these properties. This acquisition is significant as it represents PLife REIT’s foray into a third key market, which helps to improve both its tenant and geographical diversification.
France has one of the largest nursing home real estate markets in Europe that is well-positioned for further growth as the country has a rapidly ageing population. Around 22% of its residents are aged 65 and above in 2023 and this percentage is projected to rise to 28.9% by 2070.
The purchase will also allow the manager to collaborate with a leading operator and will open up opportunities for more such purchases in Europe in the future. The leases for the properties have a long initial lease term of 12 years and have built-in inflationary-linked clauses to help mitigate cost increases. Funding for the acquisition will be via a private placement where PLife REIT will issue 47,369,000 units at an issue price of S$3.
80 per new unit. Because debt will not be utilised in this transaction, the healthcare REIT’s pro forma leverage ratio is set to decline from 35.3% at the end of June to 33.
3% after accounting for the French and Japanese nursing home acquisitions. The good news is that distribution per unit will increase by around 1.8% for the first half of 2024, going from the current S$0.
0754 to S$0.0768. An outbreak of E.
Coli infection has killed one person and left dozens sickened. The problem was traced to McDonald’s quarter pounder burger in 10 states, with Colorado seeing the most number of people (26) falling ill. 10 people were admitted to the hospital out of 49 who were stricken with the bacteria.
Most of those who fell ill were eating at the fast-food chain and mentioned having consumed a quarter pounder. The US Communicable Diseases Centre (CDC) has yet to identify the source of the specific ingredient that caused the illness but is focusing on fresh onions and beef patties as the possible culprit. As a precaution, McDonald’s is temporarily removing this item from its restaurants in the affected areas while working with suppliers to replenish supply in the coming weeks.
Shares of the fast-food giant fell by 5.1% after the news broke, dipping below the US$300 level, and are now flat year-to-date. This incident is unlikely to permanently tarnish McDonald’s reputation but could temporarily affect sales numbers for this quarter.
Tesla is one of the first of the Magnificent 7 stocks to report its third quarter of 2024 (3Q 2024) results. The electric vehicle (EV) manufacturer did not disappoint. Total revenue rose 8% year on year to US$25.
2 billion with gross profit coming in at US$5 billion. Tesla reported its highest gross margin in five quarters at 19.8%.
Operating profit surged 54% year on year to US$2.7 billion while net profit increased by 17% year on year to US$2.2 billion.
The EV maker churned out a positive free cash flow of US$2.7 billion for the quarter, more than triple of what it generated in 3Q 2023. Total production stood at 469,796 units for 3Q 2024, up 9% year on year.
Total deliveries increased 6% year on year to 462,890. Tesla continued to expand its locations and supercharger points. Locations increased by 16% year on year to 1,306 while supercharger stations jumped 20% year on year to 6,706.
Tesla plans to start production on new vehicles, including more affordable models, in the first half of 2025. These new vehicles will utilise portions of the company’s next-generation platform along with its current platform. This strategy will allow Tesla to fully utilise its current maximum capacity of around three million vehicles and enable the company to report more than 50% year-on-year production over 2023’s numbers.
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