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Nat Stewart  

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  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    Hi Tehtarik,

    The company is able to make 1031 tax deferred exchanges when it sells its land and buys other properties. When, if as planned, they convert to an REIT structure, thes deferred taxes will be eliminated.
    Mar 9, 2015. 09:22 AM | Likes Like |Link to Comment
  • Hedge Funds And Their Weak Performance: The Other Side Of The Story [View article]
    The problem is that for most investors, picking a hedge fund manager is as hard as picking a good stock. And it happens that people who are already the best investors or traders are the ones that will be able to pick other good investors (within their investing competence area). So for the average person, being sold "services" is basically a loss in both circumstances.
    Mar 8, 2015. 04:44 PM | 1 Like Like |Link to Comment
  • My Top Construction Materials Stocks For 2015 [View article]
    USLM is an excellent company trading well below private market value. It also has substantial excess net cash. In fact the only complaint an investor might have is that it's capital structure is so conservative that it is harming investor returns. Hopefully they will find a solid acquisition or return some of the excess capital to investors. Regardless it is an excellent company for the long term. Good find.
    Mar 8, 2015. 11:43 AM | 1 Like Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    Linkdonald, You should go through and read the articles I linked to.

    I ask you this. Would a guy like Albright, an experienced investor and operator working for a highly prestigious firm, have purchased stock in CTO, and then effectively have asked for the job of CEO, if the opportunity was not significant?

    The entire team has a very impressive background and credentials relative to the size of this company, including recent hires like Mr. Smith. So ask yourself, why? Effectively, I believe they joined the firm because they see it as an entrepreneurial opportunity to either build a much bigger company relatively speaking from the ground up, or to flip it out to a larger REIT or investment firm in a few years for a hefty profit.

    My point is, which I attempted to convey in this article, is that it is not just about the "land bank" quality of the stock. If it was just that, I would not be all that exited.

    The real story is the conjunction of two things, both very important - The land, yes, but also the people involved. I am to a substantial degree betting on the Jockey, NOT just the horse, or "asset value".

    If I was a very wealthy person I would likely try to buy the entire company now, and then flip it out as an REIT down the road. That way I could personally capture most of the upside.

    Yes, the stock is volatile and the future is unknown - however IMO for those who want a property-real estate stock in their portfolio, I think this is a good one - U buy at far less than NAV and have a terrific team in place.

    In terms of operating on a timely basis - that is a risk, but look at the track record since 2011 - It looks extremely strong to me. Certainly, there is risk, but at least in my opinion it is reasonable.
    Mar 7, 2015. 12:00 PM | Likes Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    Speaking of the properties that the company has self-developed, check out this mornings press release:

    They have leased one of the full buildings in their self-developed business park to Teledyne for 10 years. Talk about bringing some great jobs to the area!

    The state of Florida has expanded the square footage it is leasing in the other building, which means that this recently completed asset is now 75% leased. This is more great news for the company, and for the region.
    Mar 6, 2015. 09:40 AM | Likes Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    With the first part of your comment you are not questioning CTO's plan, but rather the entire triple net lease REIT sector. That is beyond the scope of my article. Needless to say I think you are off base.

    You are also assuming that the company might be selling land "cheap" and buying "questionable" buildings." The B&N you mention was purchased under prior management.

    Part of the current strategy is that they are recycling less ideal properties into better properties with higher quality demographic bases supporting them. The company has been sitting on this land for over 100 years. at some point, to realize value, it must either be sold or developed and rented out. They have done some of their own development, however to develop all of their land would require a massive amount of capital and infrastructure. It makes tremendously more sense for a company this size to realize the value by selling land, and converting it to income producing properties. I am very happy to have an experienced team of investors (present management) working on the behalf of all shareholders.

    Companies like CVS and Walgreens do own some of their own buildings, If I recall. The issue is that as regular C-corps, they do not have the cost of capital advantage that an REIT structure does, so it is usually more favorable for them to sell buildings or lease them, and let specialized REITs own them.
    Mar 6, 2015. 09:34 AM | Likes Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    Having now seen the terms of the notes issuance, I believe the market action is highly overdone and most likely a result of convertible hedgers shorting the stock - perhaps even deliberately battering the price down in an attempt to get a more favorable conversion price.

    Regardless, the conversion price has been set at 68.90. Very significantly, the company will have the option of settling the obligation in cash - a very valuable option maintained by the company.

    I believe the purpose of this transaction is to give the company more financial flexibility and resources as it ramps up and works to get scale for its REIT conversion.

    The below was taken from the last 10K, written about the current credit agreement that the notes were issued in substantial part be paying off:

    "The revolving credit facility contains various restrictive covenants which include, among others, a maximum total indebtedness and limits on the repurchase of the Company’s stock and similar restrictions. In addition, the revolving credit facility contains certain financial covenants pertaining to debt service coverage ratios, maximum levels of investment in certain types of assets, the number and make-up of the properties in the borrowing base and similar covenants typical for this type of indebtedness."

    So in other words, I believe they will now have much more flexibility as they move forward with their plan.

    It is tricky to gauge what the real cost of capital will be on this, as we don't know how the company will ultimately settle the obligation (cash, stock, or a combination of the two).

    However, as I stated in an earlier comment, I think that management has every incentive to do things that benefit long term investors and the ultimately the share price.

    Given the strong track record so far, I am optimistic that they will put this money to work in a way that will increase shareholder value. I strongly suspect we will have a better understanding of the full rationale for this financing as events unfold.
    Mar 5, 2015. 10:36 PM | 2 Likes Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    A big part of my hypothesis is that the CEO is a good manager who is going to do things that make sense. Given this, if he wants to raise $75M to work with under terms that are more flexible, that is a good thing. If the market it too illogical in terms of pricing this security, IMO it will become a target for a larger REIT acquirer or similar. Just added to my position and will again over coming days if the decline continues.
    Mar 5, 2015. 01:14 PM | Likes Like |Link to Comment
  • Consolidated-Tomoka - Major Catalysts Plus REIT Conversion Plan Will Unlock Value [View article]
    Unless I am missing something, I think it is a good thing.

    The CEO owns a bunch of stock and has significant stock-based compensation relative to his income. I don't see any incentive for him to do something that would be dilute to shareholders. The entire management team has incentives very aligned with shareholders. A dip in price might give them a nice opportunity to bring some stock in.
    Mar 5, 2015. 01:09 PM | Likes Like |Link to Comment
  • The Special Situation At National Beverage: Delayed Is Not Denied [View article]
    I don't have much to add at this point on the main themes. I do wonder if LaCroix could benefit from a clearly distinguished "Boosted" variant that offered caffeine and a touch (just a touch!) of organic sweeter. Organic is a big deal now, and caffeine is always popular.
    Mar 4, 2015. 04:08 PM | Likes Like |Link to Comment
  • U.S. Lime & Minerals: Long Reserve Life, High Barriers To Entry And Substantial Free Cash Flow [View article]
    Looks like a nice dip to a reasonable buy level. 10K should be out soon. IMO if the company does not have any leads on new acquisitions, they should return excess cash and re-leverage with a moderate dividend recap while locking in low rates.
    Mar 2, 2015. 01:10 PM | Likes Like |Link to Comment
  • Winmark reports Q4 results [View news story]
    Great quarter! Looking forward to reading the annual report.
    Feb 25, 2015. 02:14 PM | Likes Like |Link to Comment
  • The SEC Literally Defines Herbalife As A Pyramid Scheme [View article]
    Are any distributors on here willing to sell me a shake canister? I have been noticing that my abs are not as ripped as they were 10 years ago. Also, why don't they come out with organic shakes? It seems like an obvious idea.
    Feb 23, 2015. 08:50 PM | 4 Likes Like |Link to Comment
  • Forex Trading Is Far More Hazardous To Your Wealth Than Commonly Believed [View article]
    Having defended people's right to do with their money what they want, I will say a few things that should be looked into - and definitely by potential forex traders.

    First, the fact that so many of the brokers are bucket shops and take the other side of their customers trades. The problem is if a trader is actually good, they start messing with the spread and the fills - in other words attempting to keep the customer from winning as if the customer wins, they lose. They mess with the spread (widening it) so they can trigger pockets of customer stop orders, generating more profits and trades for themselves (and losses for the customer). If they don't really let the good traders win do to skill, it is a scam if they don't reveal what they are doing (the way a casino does) up front.

    The second thing to look out for are the trading simulators that they let people "get their feet wet" with. The problem is that these things are often designed to be easy to beat, giving people false confidence. The way they can do this is by providing highly unrealistic fills (which most would-be customers can't recognize). I used one of these simulators years ago, and it literally had a "glitch" where if u understood what the glitch was, you could make unlimited "paper money" simulated profits. A less informed customer would not see the source of their gain as resulting from this "glitch" and would open a real account based on a false sense of their own potential profits.

    The reality is the average customer loses their account in a few months. What they don't see is that their loss is not really to other traders or the market, it is actually almost equal to the broker's revenue - in other words the spread they pay over and over eventually eats all their account equity - traders underestimate the impact of transaction costs on leveraged instruments.

    There are some unsavory aspects to the industry, however my thought is that regulation should be focused on ensuring they are financially sound operations and also that marketing is not highly misleading in the ways (such as) i provided above.
    Feb 23, 2015. 08:32 AM | 2 Likes Like |Link to Comment
  • National Beverage Corporation: A Growth Opportunity? [View article]
    Solid article!

    When other energy drinks talk about extreme, they are referring to things like a 25 year old guy doing wheelies on a BMX bike.

    With Rip It, on the other hand, "extreme" equals years of battlefield testing by our active-duty armed service members.

    I will take validation from the later any day - thank you! IMO the Rip IT brand is highly undervalued and has massive potential.
    Feb 20, 2015. 03:13 PM | Likes Like |Link to Comment