What Happens When Liquidity Disappears? [View article]
To many people rely on the liquidity of the market to enter and exit positions. The "real" liquidity is the ability of a company to buy back its own stock and pay dividends. Regards HL
These Companies Are Minting Debt To Buy Back Stock [View article]
Intel was more of an illustration than actual circumstance. A much deeper analysis would be required to form a strong investment opinion. I think we have to remember Eastman Kodak, Polaroid, Digital Equipment, Sun Microsystems, Lotus Notes, Word Perfect, ...companies either grow, adapt or die...AND It is not that easy to do....would you disagree?
These Companies Are Minting Debt To Buy Back Stock [View article]
Let me offer a thought, buy backs are only worth while whether a company does it with debt or cash on hand if the company is going to be around for a long time. If it is goes out of business or profitability declines, then buying back stock was a bad idea. As long as intrinsic value is growing, buying back stock is good decision. In the case of Intel, there is some question about the future of personal computer market. Is the PC market in a state of decline where the tablet takes market share? If this were the case then buying back stock might be bad idea. HL
These Companies Are Minting Debt To Buy Back Stock [View article]
This is simple math, it is not "grey", the forecasts or projections might be "grey" - but math is not , it is just cold hard facts. An investor either understands enough accounting and finance to see how the puzzle fits together...or they don't. Let me put it this way, either you understand that nothing is worth more than the net present value of future cash flows or you do not. Regards HL
These Companies Are Minting Debt To Buy Back Stock [View article]
DeepValueLover, SWY management was not able to prevent the continuous destruction of value....or future cash flows. So the buy back was not accretive. HL
These Companies Are Minting Debt To Buy Back Stock [View article]
I think you miss a "black and white" point. Stock buybacks are attractive to shareholders, create value, when they are accretive to shareholder's future equity. What that means, and you partially say this, is that if a company can buy shares at less than intrinsic value, where intrinsic value is defined as the net present value of future cash flows appropriately discounted for the time value of money and risk, then it is very attractive...otherwise no. It is "black and white"...not maybe. What is implied here is that you need to accurately forecast cash flows many years into the future which is no easy task and prone to error. It does not matter if it is done with debt, or borrowed funds. Many investors don't understand these concepts. HL
Diamond In The Rough: Part III - Post Earnings [View article]
Hi Jim,
I think you did a really GREAT JOB! Nice work. Very thoughtful. This is hands down the best work I have read of yours. Great modeling, does it matter if your forecasts are right or wrong, overstated or understated, you made assumptions...and came up with a value.
From an investment perspective, it is wait and see. We have probably 3 to 5 quarters of results before we can "jump for joy" or "throw in the towel". I would guess that the brands would have significant value to the right operator (an expert in consumer brand management).
Diamond appeals to me because I think the risk reward is attractive. The potential loss is comparatively small relative to the upside, and think the chances of being wrong are 50%, even money. Are familiar with the investment/betting concept of "expected value"?
In Search Of Yield: IRR Of 11% To 14% For Gramercy Capital Preferred A [View article]
Hi Michaelwms, a couple of thoughts, first they sold th CDO servicing business not the equity traunche of the CDO. It is good news in this sense the company continues to focus on becoming a tiple net lease business. This company is a bet on Dugan, the CEO. Regards HL
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
crabsofsteel, thanks for the reply, hope I did sound too obnoxious. There has been some talk that the 2005 CDO equity traunche might have value. It is understandable that the 2007 is a "rip up", and probably 2006, but may be 2005? I also understand that they were able to repurchase some of the the deeply discounted CDO securities which would be accretive to the equity traunche. Do you have any thoughts. Otherwise, GKK is simply a publically traded net lease start up. To the extent you are buying it a discount to book value and that you have a strong management team. This is your opportunity for better for worse. Your thoughts?
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Hi Chris: There is another emerging investment opportunity for GKK and I am not sure management sees it yet or even cares. However, there are many private REITs that investor's own and exchanging stock in a publically traded REIT with the owners of the private REIT in order to create liquidity can be an attractive trade. It can create liquidity as well as being modestly accretive to the acquiring publically traded REIT...like a reverse merger. Regards HL
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
If you look at the long term returns from IRET with the reinvestment of dividends since the IPO...an investor made ~100 times their investment...not including taxes or commissions. Patience is a virtue. Regards HL
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Hi Chris, I am not the first to say but nice article. I thought I would offer my own thought on the new management team. I dont think they would want to sell the business to a larger REIT. These guys are "builders". They strike me as the "get rich slowly" types focusing on execution and compounding of returns. Regards HL
For-Profit Education - Is American Public Education Diverse Enough To Rise Above The Rest? [View article]
So help me out here. What was the big disappointment with the quarterly numbers. They looked alright to me. Granted above 40 stock looked expensive, and certainly the sequestor might be headwind but may be not depending in DOD. I would add that the comments below from Invest4dividends highlights where my thesis is. Here you have veteran who is having a good experience combine that with the low cost provider, I think that is a competitive durable advantage. The company is not going out of business. They have no debt and revenues were 10% year over year. What are your thoughts? Regards HL
What Happens When Liquidity Disappears? [View article]
Investing In Industrial REITs Part 3: Lexington Realty Trust [View article]
These Companies Are Minting Debt To Buy Back Stock [View article]
These Companies Are Minting Debt To Buy Back Stock [View article]
These Companies Are Minting Debt To Buy Back Stock [View article]
These Companies Are Minting Debt To Buy Back Stock [View article]
These Companies Are Minting Debt To Buy Back Stock [View article]
Diamond In The Rough: Part III - Post Earnings [View article]
I think you did a really GREAT JOB! Nice work. Very thoughtful. This is hands down the best work I have read of yours. Great modeling, does it matter if your forecasts are right or wrong, overstated or understated, you made assumptions...and came up with a value.
From an investment perspective, it is wait and see. We have probably 3 to 5 quarters of results before we can "jump for joy" or "throw in the towel". I would guess that the brands would have significant value to the right operator (an expert in consumer brand management).
Diamond appeals to me because I think the risk reward is attractive. The potential loss is comparatively small relative to the upside, and think the chances of being wrong are 50%, even money. Are familiar with the investment/betting concept of "expected value"?
Regards
Henry
In Search Of Yield: IRR Of 11% To 14% For Gramercy Capital Preferred A [View article]
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
Our Best Investment Idea For 2013: Gramercy Capital, Part II [View article]
For-Profit Education - Is American Public Education Diverse Enough To Rise Above The Rest? [View article]