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  • New York Mortgage Trust - Estimating 7.87% And Not Overly Impressed [View article]
    The comparison was between the equity dividend of mREITs and the stripped yield of their selected preferred.
    Apr 20, 2015. 12:43 PM | Likes Like |Link to Comment
  • A 6.4%+ Yielding Preferred From Citigroup That Can Benefit From Rising Rates [View article]
    This is a trust preferred, capital treatment is changing. As a TRuP, it is cumulative but has no DRD/QDI treatment - something to consider. At its current Px of $26.50, it has a stripped yield of 7.55% (stripped price is around $26.06) and a yield-to-call of -0.17%. Looking at the floating rate, at L+637, using 10yr swap rates of 2%, we get a coupon of 8.37%. BAC did $2.5B of sub notes yesterday at +210/10yr = 4%. Will Citi redeem this? Odds are pretty darn good. Instead, why not look at CPrK (if you like Citi), which is not a TRuP, is DRD/QDI eligible, 1st redemption date is 11/15/23, stripped yield (at $27.43 - yes, a premium, stripped Px is $27.07) is 6.34% and the yield to call is 5.08%. Oh yeah, fixed to float (in 2023, admittedly). Just saying.
    Apr 17, 2015. 11:28 AM | 1 Like Like |Link to Comment
  • New York Mortgage Trust - Estimating 7.87% And Not Overly Impressed [View article]
    Issued at 7.875%, 4/22/20 early redemption date. $24.90 gets you 7.90%
    Apr 16, 2015. 04:19 PM | Likes Like |Link to Comment
  • Morgan Stanley Preferred Stock Paying 6.2% [View article]
    only worry about paying above par if you think there is the risk of bankruptcy, where you can't claim your premium. The risk above par is measured in the yield-to-call, and it is up to the investor to decide if it is enough. Avoiding premiums in preferred stock (at these low rates) is simply not rational. If you think there is the risk of bankruptcy, then a discount security, unless purchased distressed with a recovery estimate, is a losing proposition. A premium also implies a higher dividend rate, which lowers duration, which reduces losses when rates rise. simply compare the effect of rate increases on premium and discount preferred, the discount gets whacked more (simple bond math).
    Apr 15, 2015. 10:31 PM | Likes Like |Link to Comment
  • QTS Realty - 3.5% Dividend And Growth, But Is It Enough? [View article]
    Absolutely get your concern with General Atlantic. I understand them wanting to take some chips off the table, but it is an overhang. In some respects, however, it broadens the investor base and deepens the market for the shares. When looking at the DC space, the two largest are slow growers and QTS and COR are my top picks. Things are a little pricey, but they should still outperform in the space. Wondering why DLR and DFT aren't looking to buy one of the smaller players.
    Apr 15, 2015. 04:43 PM | Likes Like |Link to Comment
  • Bond Investors Beware, History Is Not On Your Side [View article]
    Trillions of liquidity pumped into the system. The amount of $$ injected into the system is unprecedented and cannot be reflected on these historical charts (nevermind corporate bond charts going back before there were corporate bond markets and the fact that the market is exponentially bigger than it was a mere 20 years ago). As well, unlike many inflationary periods where the govvie is printing fiendishly and selling to the public, in this case, they print and buy the majority of supply - creating a scarcity premium in bonds. Add to that the big bang of bank regulation which actually discourage lending and favor "risk free" bonds, and what you have is the market we are currently seeing. Yes, it is different this time. Pain will indeed be felt when rates go up, but for once, the government (US, EU/ECB, China - the largest holder of US debt) will feel the pain as well.
    Apr 15, 2015. 11:48 AM | 2 Likes Like |Link to Comment
  • What's So Special About One Liberty Properties' 6.6% Yield? [View article]
    has anyone followed O for more than 5 years? Recall that 10 years ago it was a credit focused REIT. Anyone remember when a buffet restaurant filling for bankruptcy was an issue with Realty Income? OLP resembles a small Realty Income before they decided to bulk up and before they figured at their size investment grade tenants was the only was to keep going. Small and diversified used to be what made Realty Income who they were. Just saying. BTW, anyone notice WAG - 5.4% of Realty Incomes revenue is closing 200 stores?
    Apr 14, 2015. 08:16 AM | 4 Likes Like |Link to Comment
  • REITs, Rates And Reality - A Further Study [View article]
    I have owned Realty Income across the capital structure on and off for a long time, but valuation has kept me from owning it for a while (yeah, missed the run, but I have to stick to my guns). I like KIM as they have simplified their structure (regret David Henry moving on, but he left it in good shape) and will, at some point, dip back into the common or preferred. Own a little DLR common, but like COR and QTS more (writing a piece on QTS now, my last one was pro and not widely available) and will probably swap part of the position into QTS for the growth and hold a little DLR for the income. BXP is a best in class type of operation and trades like it, so I tend to look for the smaller, undervalued stories (OFC/COPT). I own ARCP, bought it when they got crushed and trying to figure out their next play. One of my larger positions is NRF, which still isnt fully valued as an equity REIT when it should be (looking forward to the European spin-off as well). Own NNN in preferred stock. Own some TWO in the mREIT space, but honestly getting tired of the flatline price. Ultimately, the yield chase made too many REITs stretched in terms of valuations and I am not a huge fan of cap rates being back to '07 territory as it leaves little wiggle room. One thing that does give me some comfort is Blackstone continuing to buy property. Immense respect for them and their ability to make money in this space.
    Apr 12, 2015. 02:24 PM | 1 Like Like |Link to Comment
  • REITs, Rates And Reality - A Further Study [View article]
    The unfortunate reality, as I see it, is that the FOMC has gotten themselves into a pickle. They telegraphed an increase when one is hardly warranted. Should they attempt to back out of it, they have an optics and a credibility problem. They could increase in the fall and then fade and wait for more data to support further increases. Its a tough call, and one I don't envy. The long end of the curve (10+ years) should still rely on data and it isn't that encouraging.
    Apr 12, 2015. 02:16 PM | 1 Like Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    Jack, don't think we re looking at revisiting the 70s anytime soon, so the extreme examples are necessarily helpful. Will prices go down to reflect rising rates? Yes. Will prices go up as rates fall? Yes. 30-40 years would be a double massive super cycle.
    Mar 16, 2015. 11:55 PM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    All platforms should accommodate it, many just use different forms to enter the ticker. For example, one of the platforms I trade on is Schwab, and they list their preferreds like O+F for the Realty Income Fs. Hope this helps.
    Mar 16, 2015. 11:52 PM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    As I stated:
    With that said, let's revisit one of the common themes of REIT investors - I want the dividend, I am not in this for capital appreciation. If the price goes down, I will simply buy more and collect more income. The math holds for both the common and the preferred. If preferred prices go down, you can buy more and increase your income.

    If you are a total return investor and count on both capital appreciation and income, this trade might not work for you. At current values in the equity markets, you might not be a huge buyer of REITs anyway.

    Guess the editors read the article. Sorry you didn't find it helpful.
    Mar 16, 2015. 11:47 PM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    Great insight and resource for all of us, thanks!!
    Mar 16, 2015. 11:44 PM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    Spyre, I just wrote about rates and REITs, maybe it will help, maybe not - but it cant hurt. IYR and VNQ are two REIT ETFs, but global REIT etfs are hard to find. I have been looking at Gazit as a global REIT play, Westfield out of Australia (careful of their unit structure though) and I am looking forward to NorthStar's pending European spin.
    Mar 16, 2015. 11:43 PM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    Absolutely correct, and you are right, that should be stated in articles about REITs such as this one. Distributions will either be all ordinary income (no QDI) or a combination of return of capital and ordinary income. Great advice, I will incorporate it going forward.
    Mar 16, 2015. 11:35 PM | Likes Like |Link to Comment