Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
John, given the amount of secured debt on their books, they would not be investment grade rated, One issue you will see with smaller REITs is that they like non-recourse debt - which means debt at the property level. Their performance suffered as a result of falling rents and occupancy - both of which are still below where I would like to see them. The biggest lesson I have learned managing money is if you are not comfortable with a company, pass - there is always another one. You are right to have some reservations with this REIT, they do have some performance issues (I think that they will resolve them, but more time is needed). Thanks for reading and commenting, I appreciate it as it adds value to the discussion/analysis of this REIT. Mike
Banco Santander - Growth In Disguise [View article]
Alexcuca, Thanks for reading and sharing your experience thus far (and commiserating about kids - mine seem to want a lot for everything). I am trying my best to dig up some value so we can all have it a little easier going forward. Mike
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
Good point about if you were an employee (but in the facebook/social era, I have seen/heard of stranger things) and a better point about the dividend. I do believe in debt reduction, as I stated earlier, but the payout is low enough to increase the dividend and accomplish debt reduction goals (the "share your damn cake instead of having it and eating it" theory). Look, bottom line is that PEI has weaker metrics than their peers (as I stated in the article) and shareholders bear that risk. As a result, they should be paid. No argument from me. That is why I would take my exposure with the preferred. Again, I appreciate your comments and insight - both have added value to this discussion. Thanks, Mike
Royal Bank Of Scotland: Increased Talk Of Preferred Dividends [View article]
Agree. The only reason I can think that no announcement has been made is that the next coupon following the expiration of the two year "turn off" period is due June 30 - typically to holders on record as of June 15. That said, clarification of intent would certainly help. Mike
Banco Santander - Growth In Disguise [View article]
Nothing is gained by being biased towards one conclusion or opinion. Surfacing all possible risks is better as it allows us to better frame the potential risk/return framework. All feedback is good - I have not yet met the person who knows all and misses nothing - I certainly am not that person. I must say, Santander makes it difficult to get sovereign exposure within their portfolio. It does not flush out in their presentations and, thus far, in their filings. Kinda ticks me off, which makes me dig deeper. Stay tuned. Mike
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
davidbdc, thanks for your comment and insight (although I am struggling to determine whether the use of "we" is as a shareholder or employee). You are correct, I inadvertently used Dec 2011 occupancy levels, I apologize for the oversight.
I do not disagree with your assessment of NOI growth or the lack of dividend increases. I do, however, believe the REIT has to reduce debt. An overlevered company cannot afford to struggle and has far less flexibility when managing their business.
I agree as well with your not buying PEI at current levels, as I stated, they have gotten ahead of themselves.
Great points and good intel on PREIT, thanks. Mike
Banco Santander - Growth In Disguise [View article]
UPDATE: Spain’s government and its banks are discussing a new scheme to segregate problematic property loans into one or more asset management companies to relieve the burden on struggling lenders, according to officials and bankers.
The “bad bank” scheme is the latest attempt by the centre-right government of Mariano Rajoy, prime minister, to avoid an international rescue programme of the sort required by Greece, Ireland and Portugal.
UPDATE: Argentina is feeling the heat of their approach to YPF from multiple angles:
Brazilian mining company Vale SA (VALE, VALE5.BR) is "very concerned" about the political and institutional situation in Argentina following that country's decision to expropriate part of oil company YPF SA (YPF, YPFD.BA), and is "analyzing the merits" of its Rio Colorado potash project in Argentina as a result, CEO Murilo Ferreira said Thursday.
BUENOS AIRES (Dow Jones)--Argentine Foreign Minister Hector Timerman sent a harshly worded letter to European Union Trade Commissioner Karel De Gucht Thursday, in which he called De Gucht's recent comments about Argentina "unacceptable."
Timerman's letter comes after De Gucht questioned Argentina's import restrictions and said Argentina will face consequences for its decision to expropriate the oil and gas company YPF SA, a unit of Spain's Repsol YPF SA.
Timerman, famous for having rather testy relations with other diplomats, said Argentina faces "serious" and "growing" difficulties accessing the European market because of a wide range of measures used to block local products from entrance.
Argentina's foreign minister singled out Spain for its recent decision to effectively restrict imports of Argentine biodiesel, valued at about EUR750 million ($990 million) in 2011, according to Spain's Renewable Energy Producers Association.
"This measure represents an unacceptable discrimination which, if it is not corrected by the EU, affects half of our exports to Spain or 10% of our total exports to the EU," he said. article here: http://on.wsj.com/JKUg5c
Just a thought - you are taking the shares from Spain's flag carrier, did you really expect them to roll over. Welcome to your new economic reality.
Banco Santander - Growth In Disguise [View article]
See how the market digests the various news items, there will be more to follow on Spain and Santander (Mexico IPO, sovereign issues) see how it affects the equity and preferreds (STD-A/STD-C). You can be in a rush with this one, there will be more time to buy it. When the news doesn't push the equity down and it looks like it is holding in, leg into more of a position. No rush, there will be more to digest. I think it holds over $6 but it is not going to spike to $10 as there are still issues in the pipeline. Tap a little if news drives it down, tap a little if news doesn't drive it down but comes out. Ultimately, we have to see this trade more on valuation than news before it can find its footing and begin to recover. I personally think today's earnings were decent - the increase in provisioning is good, it builds a defense. Don't forget, the more they provision, the more they can release if the loan experience isn't as bad as they think. And if it is, they are better covered. Their capital ratios are still good, their loan to deposit came down, I think there is upside in their high growth markets and the bank is prudently putting $$ aside should Spain/Portugal get worse. I hope this answers your question - I am waiting for the news to affect it less. Of course, if it gets whacked again and goes to $6 I am a buyer. Patient buying will be rewarded - I'd rather miss a little than catch a falling knife. CEO reiterated the dividend - this will attract buyers and make shorts pay up on their borrow. The more I see, the more I like this one (more than C or BAC or, for that matter WFC). Mike
Banco Santander - Growth In Disguise [View article]
UPDATE:
Banco Santander registered attributable net profit of EUR 1.604 billion, down 24%, after provisions for NPLs rose 51% to EUR 3.127 billion. Growth outside of Spain/Portugal and efficient cost management continues to allow the bank to generate distributable profits. This keeps the div in place and gives them the flexibility to continue to increase provisions - which I expect going forward.
NPLs: The Group’s non-performing loan rate rose 0.37 point from a year earlier to 3.98%. In Spain, NPLs rose 1.18 point to 5.75%, in part due to the fall in outstanding loans. The Group’s NPL rate was more than two points below the sector average Coverage for bad loans was 62% across the Group, up one point in the quarter, and 46% in Spain. This was expected as nothing has gotten materially better during the quarter in Spain/Portugal. I also continue to expect the need for increased provisions in the near-term as the problem loans work their way through the system and austerity measures increase the amount of NPLs.
Latin America contributed 52% of Group profit (Brazil 27%, Mexico 13% and Chile 6%); Continental Europe 25% (Spain 12%, Germany 5% and Poland 4%); the United Kingdom 13% and the U.S. 10%. The diversification benefits are showing.
Loan to deposit ratio improved 200bps to 115%.
Stock down on the results and higher provisions. Preferreds held in well.
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
Banco Santander - Growth In Disguise [View article]
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
Seeking Alpha And Diversifying With Omega [View article]
Royal Bank Of Scotland: Increased Talk Of Preferred Dividends [View article]
Royal Bank Of Scotland: Increased Talk Of Preferred Dividends [View article]
Banco Santander - Growth In Disguise [View article]
Pennsylvania REIT: Equity Undervalued And Preferred Attractive [View article]
I do not disagree with your assessment of NOI growth or the lack of dividend increases. I do, however, believe the REIT has to reduce debt. An overlevered company cannot afford to struggle and has far less flexibility when managing their business.
I agree as well with your not buying PEI at current levels, as I stated, they have gotten ahead of themselves.
Great points and good intel on PREIT, thanks. Mike
Banco Santander - Growth In Disguise [View article]
ps, great article on CVX and the Latin American shift. Can be found here: http://seekingalpha.co...
Banco Santander - Growth In Disguise [View article]
The “bad bank” scheme is the latest attempt by the centre-right government of Mariano Rajoy, prime minister, to avoid an international rescue programme of the sort required by Greece, Ireland and Portugal.
Article here: http://bit.ly/IkebGV
I know, it's from the same site that gives us the fire fueling, topic de jour talking heads, but I thought it was worth sharing. Mike
YPF Sociedad Anonima - A Short-Term Buy; Reduced Results Longer-Term [View article]
Brazilian mining company Vale SA (VALE, VALE5.BR) is "very concerned" about the political and institutional situation in Argentina following that country's decision to expropriate part of oil company YPF SA (YPF, YPFD.BA), and is "analyzing the merits" of its Rio Colorado potash project in Argentina as a result, CEO Murilo Ferreira said Thursday.
http://fxn.ws/JKUg56
BUENOS AIRES (Dow Jones)--Argentine Foreign Minister Hector Timerman sent a harshly worded letter to European Union Trade Commissioner Karel De Gucht Thursday, in which he called De Gucht's recent comments about Argentina "unacceptable."
Timerman's letter comes after De Gucht questioned Argentina's import restrictions and said Argentina will face consequences for its decision to expropriate the oil and gas company YPF SA, a unit of Spain's Repsol YPF SA.
Timerman, famous for having rather testy relations with other diplomats, said Argentina faces "serious" and "growing" difficulties accessing the European market because of a wide range of measures used to block local products from entrance.
Argentina's foreign minister singled out Spain for its recent decision to effectively restrict imports of Argentine biodiesel, valued at about EUR750 million ($990 million) in 2011, according to Spain's Renewable Energy Producers Association.
"This measure represents an unacceptable discrimination which, if it is not corrected by the EU, affects half of our exports to Spain or 10% of our total exports to the EU," he said.
article here: http://on.wsj.com/JKUg5c
Just a thought - you are taking the shares from Spain's flag carrier, did you really expect them to roll over. Welcome to your new economic reality.
YPF up 5% today.
Banco Santander - Growth In Disguise [View article]
Banco Santander - Growth In Disguise [View article]
Banco Santander registered attributable net profit of EUR 1.604 billion, down 24%, after provisions for NPLs rose 51% to EUR 3.127 billion. Growth outside of Spain/Portugal and efficient cost management continues to allow the bank to generate distributable profits. This keeps the div in place and gives them the flexibility to continue to increase provisions - which I expect going forward.
NPLs: The Group’s non-performing loan rate rose 0.37 point from a year earlier to 3.98%. In Spain, NPLs rose 1.18 point to 5.75%, in part due to the fall in outstanding loans. The Group’s NPL rate was more than two points below the sector average Coverage for bad loans was 62% across the Group, up one point in the quarter, and
46% in Spain. This was expected as nothing has gotten materially better during the quarter in Spain/Portugal. I also continue to expect the need for increased provisions in the near-term as the problem loans work their way through the system and austerity measures increase the amount of NPLs.
Latin America contributed 52% of Group profit (Brazil 27%, Mexico 13% and Chile 6%); Continental Europe 25% (Spain 12%, Germany 5% and Poland 4%); the United Kingdom 13% and the U.S. 10%. The diversification benefits are showing.
Loan to deposit ratio improved 200bps to 115%.
Stock down on the results and higher provisions. Preferreds held in well.