correction:the following statement is incorrect:Safeway owns most of its store base and distribution facilities. SWY owns about 40-50% of the store base
The main factor for this industry is the general economy and consumer confidence. As we pointed out above when the economy recovered in 2002-2006 these guys experienced a rapid increase in pricing power which led to an increase in op income of over 60%. You are correct, there are many things that can improve, quality control in the hot foods, better deli, better in store brands etc. At the same time our statement that the company has returned over $ 2.5 billion to shareholders through stock buybacks and dividends in the last 24 months shows that the company is doing quite well.
O.K. but WMT is losing same store sales and SWY is gaining. An indication that WMT is losing some business to SWY. Part of the reason is the convenience and higher quality of the grocery stores. The myth that WMT is doing anything is busted by the actual data. Also WMT is normally ranked in the bottom 10% by consumers for grocery and has ended up last many times. The high price leader myth is fairly subjective, in the grocery game prices are rotated fairly regularly. The convenience factor is key. Would you drive to 3 stores to get what you could at SWY just to save $3.00?
"We knew we were in for a fight before we bought the first share," says Corvex managing partner Keith Meister (formally of Icahn Enterprises) of his activist role in CommonWealth REIT (CWH). He's gaining allies - Perry Capital has joined Corvex and Related, with the three accounting for 21% of the shares. Another 20 hedge funds - owning maybe another 4% of the company - have contacted him about joining the team. (earlier) [View news story]
Since CWH trades at a 35% discount to book and the average REIT trades at 2X book it makes sense. These guys may be able to convince a judge to move the proxy forward, or they may just pay the Portnoys to go away. Another question..what happens to the offspring of cwh that are in the same position..SIR, GOV, SNH and HPT
Salesforce.com: Party Like It's 1999 - Update [View article]
Good article! As a student of subscription based models, I see that this one is missing a key element: Expanding margins accompanying the growing revs. The fact that the margin is contracting is a sign of churn, increased competition or other unhealthy items. I can't see why anyone would like to own this thing at over 55 X EBITDA (if there is actually any). The business combination accounting merits further investigation. Looks like If not for the addition of 740 mm in goodwiil from biz combinations CRM would have lost book value in the 1st 9 months of 2012. Why does the market love this thing?
Safeway: Numerous Challenges Suggest Avoidance Is The Best Strategy [View article]
The Morning Star analysis of SWY aint the best thing. There are a few factual errors as well as other problems. MS Notes: "Over the long term, we still believe the food market share shift trend to super centers, wholesale clubs, and dollar stores continues."
Super centers actually lost market share in the last 24 months, Mass merchants like WMT and TGT that are not grocers also lost share. People are confusing the reduction in volume consumption as mkt share loss in some cases. Also MS fails to tell us that he is only addressing the CPG category. Traditional grocers still dominate produce, deli, dairy, seafood, meats, flowers wine and liquor or what are known as groceries.
Also the morning star analyst used a DCF model. Which is not appropriate for an asset that produces cash flow but also has a heavy asset portfolio. Just try to match any REIT or other stock price with a DCF model. Also MS fails to inform you of the effects of the recapitalization, or of the one time expenses when addressing margins and Y over Y gross net income. misleading KR just reported better than expected earnings, raised the div 30%and boosted the guidance for the year 2 weeks ago based on the same time period SWY is getting ready to report on. So the margins should improve.
France Telecom's 12% Yielding Shares May Be Poised To Drop On A Dividend Cut [View article]
The management has guided to 40-45% of operating cash flow for the dividend, and 8Bil of OCF for 2012 over 4 times this Q, including 2 weeks ago. There really isn't a large div decrease anticipated by anyone other than those ogling the current yield and speculating. If OCF drops to 6B euro in 2013 the div would still be over a dollar. FTE trades at 4X ebitda and T trades at 7. The price action is disappointing but the company and div look OK
1 year SWY year paper is trading at t+ 110 10-20 year paper is trading at T+ 250-300 so credit markets "heart symbol" this thing. Also wake up! KR just reported better than expected earnings, raised the div 30% and boosted the guidance for the year 2 weeks ago based on the same time period SWY is getting ready to report on. SWY will do the same on October 11; but usually raises the div in May after 1st Q ( which it did for the last 7 years). Also read the report it tells you that the company has $34 per share in real estate at the original purchase price, which is ....wait for it....more than the $15 and change trading price it closed at today.
So Shorties will be covering this thing into the high 30s next year
CommonWealth REIT's Exceptional Portfolio Is Spoiled By The Public Perception Of RMR [View article]
Good observation on the payment of a bond when they could have purchased stock. Probably because they care more about the credit rating than the stock dividend ( they don't want to loose the ability to continue to grow the portfolio). They could have made the stock holders more confident and the dividend more secure.
External Manager RMR Causes Concern At CommonWealth REIT [View article]
look at the second table: (We have created the following chart to demonstrate the disparity in valuations of various REITs and CommonWealth) column 8: the percentage of operating costs and & G&A as a percentage of revenue. This demonstrates a 10% higher cost than the next highest example. Which is not so good. After backing out the static 50 basis point fee ($40 mm or so a year) they still have the highest operating cost as a percentage of revenue. This static fee is in addition to the normal management fee Also what you are buying is a share of stock so it is meaningful to examine the metrics on that level. The spinoffs have not been to the shareholders, so they have lost value. It may be a pure play on downtown cbd in 3 years, but they could spinn this off as well.
External Manager RMR Causes Concern At CommonWealth REIT [View article]
Based on the numbers from first Q, the dividend paying ability (CAD) (on an unconsolidated basis, after receiving the SIR dividend) is down 22% from 4th q 2011 to 2nd Q 2012. This is the actual cash available for distribution. Shown in the table: our various projections, column 4. So the future may not be better than the past
A Bull Case For Safeway [View article]
A Bull Case For Safeway [View article]
A Bull Case For Safeway [View article]
"We knew we were in for a fight before we bought the first share," says Corvex managing partner Keith Meister (formally of Icahn Enterprises) of his activist role in CommonWealth REIT (CWH). He's gaining allies - Perry Capital has joined Corvex and Related, with the three accounting for 21% of the shares. Another 20 hedge funds - owning maybe another 4% of the company - have contacted him about joining the team. (earlier) [View news story]
Salesforce.com: Party Like It's 1999 - Update [View article]
Why does the market love this thing?
Safeway: Numerous Challenges Suggest Avoidance Is The Best Strategy [View article]
Super centers actually lost market share in the last 24 months, Mass merchants like WMT and TGT that are not grocers also lost share. People are confusing the reduction in volume consumption as mkt share loss in some cases. Also MS fails to tell us that he is only addressing the CPG category. Traditional grocers still dominate produce, deli, dairy, seafood, meats, flowers wine and liquor or what are known as groceries.
Also the morning star analyst used a DCF model. Which is not appropriate for an asset that produces cash flow but also has a heavy asset portfolio. Just try to match any REIT or other stock price with a DCF model. Also MS fails to inform you of the effects of the recapitalization, or of the one time expenses when addressing margins and Y over Y gross net income. misleading
KR just reported better than expected earnings, raised the div 30%and boosted the guidance for the year 2 weeks ago based on the same time period SWY is getting ready to report on. So the margins should improve.
Safeway Is A Strong Buy [View article]
France Telecom's 12% Yielding Shares May Be Poised To Drop On A Dividend Cut [View article]
Safeway Is A Strong Buy [View article]
10-20 year paper is trading at T+ 250-300
so credit markets "heart symbol" this thing. Also wake up!
KR just reported better than expected earnings, raised the div 30%
and boosted the guidance for the year 2 weeks ago based on the same time period SWY is getting ready to report on. SWY will do the same on October 11; but usually raises the div in May after 1st Q ( which it did for the last 7 years). Also read the report it tells you that the company has $34 per share in real estate at the original purchase price, which is ....wait for it....more than the $15 and change trading price it closed at today.
So Shorties will be covering this thing into the high 30s next year
Safeway Is A Strong Buy [View article]
Safeway Is A Strong Buy [View article]
CommonWealth REIT's Exceptional Portfolio Is Spoiled By The Public Perception Of RMR [View article]
External Manager RMR Causes Concern At CommonWealth REIT [View article]
Also what you are buying is a share of stock so it is meaningful to examine the metrics on that level. The spinoffs have not been to the shareholders, so they have lost value. It may be a pure play on downtown cbd in 3 years, but they could spinn this off as well.
External Manager RMR Causes Concern At CommonWealth REIT [View article]
Shown in the table: our various projections, column 4.
So the future may not be better than the past