Posted by hissyu2 > 2015-11-05 00:14 | Report Abuse

Sir, will this be useful for REIT as well? REIT is usually investing a lot and generally the CAPex will be relative higher... Anyway, as long as the company or REIT didn't have negative cashflow for many years, it should be "safe"... negative cashflow could happen or beneficial if we are seeing acquisation of new facility/warehouse ?? Pretty hard for a newbie like me to take a balance of them sometimes, for cases like this which is a little bit tricky...

Posted by kcchongnz > 2015-11-05 09:31 | Report Abuse

Posted by hissyu2 > Nov 5, 2015 12:14 AM | Report Abuse
Sir, will this be useful for REIT as well? REIT is usually investing a lot and generally the CAPex will be relative higher... Anyway, as long as the company or REIT didn't have negative cashflow for many years, it should be "safe"... negative cashflow could happen or beneficial if we are seeing acquisation of new facility/warehouse ?? Pretty hard for a newbie like me to take a balance of them sometimes, for cases like this which is a little bit tricky...


I don't see any problems for Reits to have negative FCF because of the reinvestment needs for buying more properties, provided that the money invested yields good return higher than its costs of capital.

The problem is for some manufacturing companies because of the economics of the business, are continuously required to reinvest in machinery and equipment just to keep the doors open, and results in persistent negative FCF.

Posted by hissyu2 > 2015-11-05 21:09 | Report Abuse

Thank you sir for sharing me with your opinion. appreciated.