Seeking Alpha

Marc Gordon

 
View as an RSS Feed
View Marc Gordon's Comments BY TICKER:
Latest  |  Highest rated
  • Bluerock Residential Growth REIT: An IPO We Plan To Avoid [View article]
    Don, now that roughly six months have passed since the IPO, do you still believe that BRG should be avoided? At what price would you consider it a buy?
    Sep 4 11:31 PM | Likes Like |Link to Comment
  • American Realty Capital Properties: High-Yield Play Ready To Narrow Valuation Discount To Peers [View article]
    Mike, sorry about the typo, yes I meant Lobster. I don't know where the bird came from!
    Sep 3 06:36 PM | Likes Like |Link to Comment
  • Why Will This New Net Lease REIT Be A Game Changer? [View article]
    Brad, thanks for this interesting article. However, you missed that STORE's sixth largest tenant is Corinthian-owned Heald College. The U.S. Department of Education in June notified Corinthian Colleges, the owners of Heald, that due to what has been called an enormous case of fraud and promises to students that could not be fulfilled, no new federal loans to students will be issued at Heald and other Corinthian assets, which may lead to permanent closure of the individual institutions. Corinthian has stated that it will go out of business, and now is struggling to find buyers for 85 of its U.S. campuses, including Heald, before it is forced to close them. That single tenant (Heald) may result in a 2% default rate this year or next. Does this give you pause about stating "STORE provides a unique platform with favorable risk-adjusted returns"? They were certainly wrong on the assessment of Heald College. Also, what impact will it have on STORE's value if Heald does default, as seems likely?

    http://bit.ly/1pKn5pq
    Sep 3 06:18 PM | 3 Likes Like |Link to Comment
  • American Realty Capital Properties: High-Yield Play Ready To Narrow Valuation Discount To Peers [View article]
    Thanks for these thoughts Bret. I have a half position in ARCP because while I agree with what you wrote, there is significant risk that ARCP overpaid for the Red Robin acquisition, since it is unlikely that Golden Gate Capital will be able to reverse this tired brand's gradual decline (plus concentration risk for ARCP). I am interested in how you factor that into your thoughts on ARCP.
    Sep 3 01:59 PM | Likes Like |Link to Comment
  • The Pathway To Creating Wealth With REIT Diversification [View article]
    Thanks for this article Brad. You state that this bull REIT market is "in the bottom of the 3rd inning." If the average length of the full real estate cycle is 18 years, and half is the bull portion and half is the bear portion of the cycle (is that a reasonable assumption?), then the bull portion on average lasts 9 years. Since we are 5.5 years into the current recovery, then aren't we 5.5/9 years through this bull phase, which would place us in the bottom of the FIFTH inning, not the third?
    Aug 30 01:00 PM | Likes Like |Link to Comment
  • W.P. Carey, NNN Report Great Q2 Results Utilizing 2 Very Different Strategies [View article]
    Bill, thanks for this article. I own both NNN and WPC to diversify across their different business strategies, while benefitting from their excellent execution of their strategies. I consider these two REITs, along with O, my core long term REIT holdings.
    Aug 10 01:30 PM | 2 Likes Like |Link to Comment
  • Realty Income: When To Buy In A Rising Interest Rate Environment [View article]
    Mar Galat, the simplest answer is that you can't go wrong by placing REITs in a Roth account. Also,if you are in a low marginal tax bracket, it really won't make a big difference.

    The more sophisticated answer is that in what type of account a REIT should be bought in depends on how high your marginal tax bracket is, and whether the REIT distributes mostly dividends, or as many do, distributes substantial "return of capital". For REITs, dividend distributions for tax purposes are allocated to ordinary income, capital gains and return of capital, each of which may be taxed at a different rate. All public companies, including REITs, are required early in the year to provide their shareholders with information clarifying how the prior year's dividends should be allocated for tax purposes. This information is distributed by each company to its list of shareholders on IRS Form 1099-DIV. An historical record of the allocation of REIT distributions between ordinary income, return of capital and capital gains can be found in the Industry Data section of REIT.com (which I cribbed some of this from).

    A return of capital distribution is defined as that part of the dividend that exceeds the REIT's taxable income. A return of capital distribution is NOT taxed as ordinary income. Rather, the investor's cost basis in the stock is reduced by the amount of the distribution. When shares are sold, the excess of the net sales price over the reduced tax basis is treated as a capital gain (great news!) for tax purposes. So long as the appropriate capital gains rate is less than the investor's marginal ordinary income tax rate, a high return of capital distribution may be attractive.

    So, if the REIT distributes mostly dividends, buy it in a Roth. If it distributes mostly return of capital, buy it in an ordinary taxable account. For example, about 60% of O's distributions are dividends so this might go into a Roth, versus ARCP where about 60% are not dividends and so ARCP might go into a regular account to take advantage of delayed taxation and eventual capital gains treatment.

    I hope this helps.

    Marc
    Aug 6 03:56 PM | 2 Likes Like |Link to Comment
  • An Intelligent Investor Should Consider REITs [View article]
    Brad, as a long time reader I have always considered you a valuable REIT analyst, not a cheerleader. In fact, I employ your articles as my first screen, that is, if you have not given it a thumbs up, I don't consider it further. If you like it, I do further DD. I think bruce has one valid point in that in the past you sometimes skimped on describing the downsides of REITs that you liked, but I have noticed more recently that you have improved this aspect of your writing (ARCP being an excellent example), which I very much appreciate. Thank you very much for your articles, and for your responses to comments which can also be highly informative. Don't let the occasional sniping bother you, there will always be naysayers no matter what one does. Keep up the good work!
    Jul 23 05:58 PM | 2 Likes Like |Link to Comment
  • 2 Tactical Municipal Bond Strategies For Non-Qualified Retirement Portfolios [View article]
    A CEF is a closed-end fund, which is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. Unlike regular stocks, closed-end fund stock represents an interest in a specialized portfolio of securities that is actively managed by an investment advisor and which typically concentrates on a specific industry, geographic market, or sector. The stock price of a closed-end fund fluctuates according to market forces (supply and demand) as well as the changing values of the securities in the fund's holdings.
    Jul 7 01:18 PM | Likes Like |Link to Comment
  • 2 Tactical Municipal Bond Strategies For Non-Qualified Retirement Portfolios [View article]
    Back testing, such as that used in this article, should always be viewed with great skepticism. 'If many trials are done on the same data set, something will inevitably be found to outperform—even if it is a “false positive” caused by luck alone.' Everyone should read an article that Jason Zweig published in the WSJ about a week ago titled "Huge Returns at Low Risk? Not So Fast" that discusses how flawed back testing is. You can find it at http://bit.ly/1zi1NlA
    Jul 6 01:27 PM | Likes Like |Link to Comment
  • Frontier Remains A Stock Of Choice For Income Seekers [View article]
    FTR Free Cash Flow as of March 31, 2014, was $167 million, down from $270 million as of December 31, 2014.
    http://bit.ly/TGd1Q6
    With FTR's quarterly dividend of $0.10, this is a payout ratio of 222%.
    http://bit.ly/TGd1Qa
    Buying the Connecticut assets "is estimated to improve Frontier's dividend payout ratio by more than 5 percentage points in the first year."
    http://bit.ly/TGd12H
    During the past 13 years, the highest Dividend Payout Ratio of Frontier Communications Corp was 17.86. The lowest was 0.63. And the median was 2.08.
    http://bit.ly/TGd1zG
    So Frontier is currently close to its median Dividend Payout Ratio for the past 13 years
    Jun 28 02:01 PM | Likes Like |Link to Comment
  • United Development Funding - Short-Term Upside For Small Investors [View article]
    Be aware that if you have multiple brokerage accounts (such as a Roth, Traditional IRA, Rollover IRA, and a regular account) that it is the total of shares that is considered as to whether it is an odd lot, not the number of shares in the individual account. For example, if you have four accounts in your name each with 60 shares, then you have 240 shares total, which is above the 99 share maximum required to avoid possible pro-rationing.
    Jun 24 02:49 PM | 1 Like Like |Link to Comment
  • Silly Rabbit, Externally-Managed REIT Tricks Are For Kids [View article]
    Thanks Brad for your thoughts, which I highly value! They are very helpful, and I do agree that I am solely responsible for any action I might take. Due diligence is always the key, even if I reserve a highly rated place for your knowledge.
    Jun 22 06:31 PM | Likes Like |Link to Comment
  • Silly Rabbit, Externally-Managed REIT Tricks Are For Kids [View article]
    Brad, I have asked this twice before but you have not responded, so I am hoping the third time will be the charm. Since you started this article discussing HCT, would you recommend HCT shareholders like me:
    1. sell now, at about $10.85 per share, or
    2. wait and elect to receive 0.1688 Ventas common shares, or
    3. wait and elect to receive $11.33 in cash for each share of HCT common stock they own
    Jun 19 11:59 PM | Likes Like |Link to Comment
  • United Development Funding - Short-Term Upside For Small Investors [View article]
    Thank you for this interesting investment idea.
    Jun 11 01:48 PM | Likes Like |Link to Comment
COMMENTS STATS
440 Comments
364 Likes