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  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    http://bit.ly/1C8z0xI

    "Dallas Fed numbers collapse at fastest pace since Lehman"... we'll see
    Apr 1, 2015. 12:12 PM | 2 Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Shaw, what do you think of the just-announced 17,500,000 secondary offering by Blackstone?

    Lets see if those sales happen. There's a reason Blackstone IPO'd this into a weak market instead of selling the underlying assets or turning it into a REIT. And lets see those franchises actually open, and see if EBITDA actually grows for the year.
    Mar 23, 2015. 04:56 PM | Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Raj, the "market clearing" price on that day was $58. LQ has exposure to a number of these "small markets" with exposure to oil. LQ RevPAR increased coinciding with economic growth and increased employment in their underlying markets, almost half of which are Texas and other oil states.

    If the stock is at $24 with a 5 year string of rev par growth, what will it be at when rev par "surprises" lower? The fundamentals are in place for rev par to disappoint, and management is evading answering questions about those fundamentals.

    I think about Rex Energy (REXX), which had traded up to almost $30 on the back of quarter over quarter growth from 2009 to 2013, consistently beating numbers. When they stated missing numbers, that stock went all the way down to $2.50, down over 90% peak to trough. I don't think LQ's fundamentals are likely to deteriorate as much as REXX's did, but the point is that "beat and raise" stocks tend to fall materially when they miss. And LQ's fundamentals seem to be lining up for a big miss.
    Mar 20, 2015. 04:51 PM | Likes Like |Link to Comment
  • Oil: Dallas Sellers Club [View article]
    Hi Eric, have you looked at my work on La Quinta? I think lodging may also be substantially negatively impacted, and La Quinta (LQ) seems to have the most regional exposure. It has actually traded up even more than these banks.
    Mar 19, 2015. 01:54 PM | 2 Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    1) at $58, it is unlikely they are making money
    2) it is in the data but is a much longer conversation
    3) Blackstone is the controlling shareholder and just filed that it is selling another 15-20% of La Quinta
    4) what? 2009 was the last downturn. the low 4 star hotel rates then are indicative. I recall 2.5 star hotels going for <$30 per night.
    5) Short interest ticked up materially in the past few months. There are 3 million more shares short now than on December 31st, over $60 million. I'll politely suggest that large additions to short positions are more material than anonymous internet troll comments.
    Mar 17, 2015. 02:00 PM | Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Why would you want to own a stock going into further massive insider selling? Blackstone is a great investment firm. I'd rather go the direction they're going than the other way. They're selling, I'm shorting, and you're... buying?
    Mar 13, 2015. 03:59 PM | 1 Like Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Shaw, the numbers you're referring to are backwards looking, and in many cases are reflective of an environment prior to the dropping of hundreds of rigs and increased economic malaise in Texas and other key LQ markets.

    Look forwards. Do you really think that over-built markets such as Houston are going to hold up? I stayed at 4 star hotels in Houston in 2009 for ~$50 per night. And my understanding is that things were even worse in the crash of 1986.
    Mar 13, 2015. 03:58 PM | Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Midland pricing and utilization has led pricing and utilization across Texas. We're watching the unwinding of growth in Texas, which is being felt in lodging, among other sectors.
    Mar 13, 2015. 03:56 PM | Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    Raj,

    The metrics you're mentioning are rearview mirror oriented. La Quinta grew through, among other things, following economic growth and oil field activity. That growth, in states like Texas, is faltering. And that activity has fallen off. Going forward, metrics may look much worse.
    Mar 13, 2015. 03:55 PM | Likes Like |Link to Comment
  • La Quinta Texas Room Rates Drop 25%, Management Evades Question About Regional Exposure [View article]
    You took that quote out of context. He's talking about the 3% of systemwide revenue that oil & gas CORPORATE ACCOUNTS account for. He's not addressing the 26% of revenue that Texas accounts for, or the almost 50% of revenue that Texas + other large oil producing states account for.
    Mar 13, 2015. 03:53 PM | 1 Like Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    And incidentally, La Quinta's posted rates for Midland area hotels are down. The La Quinta "Inn and Suites" property room rate is down to $218 posted rate (available via Kayak.com) from $290 posted rate in January. And the La Quinta "Inn" room rate is down to $130 from $175 in January. (prices cited in this article: http://seekingalpha.co...)

    Midland will feel an exaggerated effect, but with more than 1/4 of its revenue from Texas and almost 50% from oil producing states, forward looking prospects may be much more negative than the backward looking data that you are citing. Note management's failure to respond to this question...
    Mar 12, 2015. 11:43 AM | Likes Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    The hotwire numbers are not at all misleading - I was curious, so I pulled up priceline and hotwire for a room in Midland today. I see a 2.5 star hotel on Priceline's "express deal" in Midland for $58, and a 3 star hotel in Odessa for $58.

    Do you really think that a "rising lodging cycle" will continue in the midst of a regional downturn? LQ management is obviously concerned, so much so that they dodged that question on their recent conference call.
    Mar 12, 2015. 11:34 AM | Likes Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    Shawspring,

    Perhaps. It depends on who is traveling and why they're traveling. And it depends on how much capacity was built for each. Supply and demand. In the '86 downturn in Texas, "select service" hotels did worse. In '08, luxury did worse. With the number of low level oil company employees being laid off as the rig count continues to plummet, perhaps this downturn in Texas will be more like '86.

    Note how deeply discounted 2* and 2.5* hotels across Texas are on Hotwire. Numbers will likely continue to deteriorate for select service lodging providers in Texas going forward.
    Mar 9, 2015. 05:29 PM | Likes Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    Carl, that sounds pretty anecdotal. La Quinta has hundreds of locations in Texas. As the local economy spirals downward amidst waves of layoffs, local lodging providers will suffer. Perhaps the "more popular" ones will suffer even more.
    Mar 9, 2015. 03:59 PM | Likes Like |Link to Comment
  • SandRidge Energy: What Happens Once The Cash Pile Runs Out? [View article]
    Great article
    Mar 4, 2015. 04:27 PM | Likes Like |Link to Comment
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