Discovered: The Last Undervalued Apartment REITs [View article]
Thank you for the comment.
According to the latest report, the RAS occupancy rate is 90%, but that is a little lower than the others in this article. It does give room for improvement without adding more properties. I was unable to determine the class of the properties.
The dilution is a concern, but maybe the offering in March will be the last for a while.
Discovered: The Last Undervalued Apartment REITs [View article]
I tend to agree that AEC is the more reliable investment.
The losses in RAS are non-cash charges for mark-to-market security changes. This goes both ways and is variable for this kind of company. The operating income is positive and the net cash reported lately is positive...that is one reason they were able to raise the dividend after a long time without a change. RAS also has $10.78 in cash according to Yahoo, although we used the book value of $ 6.53, not the Yahoo value of $16.58, in our calculations, to even out the securitization effect and preferred stock.
All that said, we do look at RAS somewhat as a turn around stock.
Actually Yahoo identified Ebay and Amazon as the "peers" to CafePress. The idea was to indicate the profit margins, growth, etc. that are historic in the business. No knock on AMZN or Ebay, both of which obviously are very successful companies.
I also indicated some concern about the long-term viability of PRSS.
Trans World Corporation: The Little Casino Stock That Could [View article]
cp757
I do not think you need to worry about TWOC...if you had read the article you would know that the company is small and the stock trades very thin. Today's listing on the OTC BB is a positive step in the right direction to help remedy that. It will give the company more exposure, and many retail discount brokers restrict trading in pink sheet stocks, but will allow trading in OTC BB stocks. This stock continues to move forward.
I do think you should be worried about the fact that LVS lost about 20% of its value in the last month or so. I also think that you should worry that it sliced through the 200-day moving average as if it did not exist, and now that has turned into overhead resistance. Today it dropped 3% off the 200-day average. LVS has the characteristics of a "falling knife," and its main growth driver is an economy that is questionable at best. The Shanghai and Hang Seng index have cratered, and these are considered leading indicators of the Chinese economy. We all hope for a "soft landing" for the sake of all markets, but stocks such as LVS will be affected more directly and quite negatively by the Chinese slowdown.
Pumping LVS on this comment section will not create a safety net under the stock where only air exists. No one knows where the bottom is, and the book value is $12. It is curious that you mention the "free cash flow" as I think you should also be worried that the "levered free cash flow," the actual cash that goes in the bank after debt service, is about $700,000 annually for LVS, according to YAHOO. Tiny TWOC has three times that in levered fee cash flow, and MGM, about 1/7th the size of LVS, has more than $1.2 billion. I never understand why companies think interest expense should not be considered in earnings and cash flow calculations...well, yes I do.
The philosophy of investing in the best of breed is sound, but is not without risk. People that jump on bandwagons also jump off pretty quickly. You may disagree with my philosophy of mixing in some small under-the-radar stocks that have obvious intrinsic value...it is a free country and I get one-cent for each of your comments.
TWOC is a real operation with good management and growing despite tough times. The China factor is just now being factored into the LVS stock price, The Euro factor is already figured into the TWOC price, so there is room for improvement. The main negative is the liquidity issue, but this is not a trading stock, and the company obviously is working on that by the OTC BB listing decision.
Beyond The Velvet Rope: 3 Enhanced Income Investments [View article]
nivramkoorb
Good comment. I encourage those with even speculative portfolios to add some strategies so that the entire portfolio can count on at least 2% in annual dividend income. It is amazing how much calmer we are about daily market fluctuations, knowing that the 2% is pretty reliable and competitive with fixed income investments.
Trans World Corporation: The Little Casino Stock That Could [View article]
cp757
It is clear that you have high expectations for LVS. A lot of investors do. My only comment is that it has a much higher PE than TWOC. I do not think that anyone invests in companies simply because they have a low PE or high book value, but those metrics do give us a clue as to how far the stock can fall when bad news hits, economies falter and investors become disenchanted.
If you think that generous government concessions to spur development are an indication that the government is your "best friend forever" you may be in for a rude awakening. I have been involved in international real estate development for 20 years and I see the same formula play out over and over: concessions, development, honeymoon period then added fees and/or taxes. Even governments that do not start with the strategic idea of adding fees later usually end up facing political pressure or changes to do so. This especially happens when the adjacent economy cools, real estate prices collapse and governments are accustomed to big revenue from the gambling sector...you should determine if Macua is heading for this scenario.
Other realities that are usually not considered:
--Costly bribes to officials, hidden as such things as "non-competitive awards to preferred suppliers."
--Mafia-style labor syndicates that shut down, or threaten to shut down, important operations unless the casino pays outrageous labor rates or, more likely, extravagant dues to the syndicate.
--Inevitable cost overruns on infrastructure projects that somehow are expected to be borne by the private developers...the bigger the project, the bigger the overruns.
I am sure that LVS has taken those into account in their business plan as they also have experience. The problem is that no one can identify exactly when those issues will surface, and the results can vary from small hits to the profit margins to alarming press releases. As I said, when that happens, it is good to know how far the price can fall. At least, TWOC is largely past those issues.
LVS and TWOC are for different types of portfolios, and really should not be competing for investment dollars. I actually like much about LVS, but I have clients that want to invest their Roth IRAs in small companies that their institutional and 401K funds are not looking at.
Trans World Corporation: The Little Casino Stock That Could [View article]
Nobody ever beat the stock market in the long-term investing in the obvious.
Anything related to Europe has to be considered a contrarian play at this time. The Czech Republic, Germany and Austria are some of the most stable economies in that area, although you are right insofar as the growth rate there is mild compared to some emerging markets. Growth potential is not limited to country gowth, as growth can also come from a unique product, selective location, better business model, cultural changes, exchange uplisting, etc.
I am not overly excited about the hotel occupancy, but it is a relatively new hotel, operating in a difficult economy. It is showing progress and profitable, so there is plenty of room for growth here also.
One point of this article is that casinos anywhere are subject to special government regulation and taxes, as well as the whims of the local economy, and TWOC has experienced the worst of those influences and still has produced double-digit growth. That shoe remains to fall in some of the other more touted operations in emerging markets. I have worked internationally for 20 years and can tell you that despite all the government assurances to spur development, once the profits start rolling in the government stricks its big hands out for a cut.
Finally, valuation is not limited to growth prospects. Casino and hotel companies are in some ways real estate developers. That is why many REITs are involved in the hospitality market. If TWOC were to be valued as a REIT and paid out the levered free cash flow to investors, it would be valued at $5 and have a 6% dividend. The company chooses to reinvest free cash flow in expansion opportunities. One 77-room, four-star hotel would cost at least half the company value to build.
The CEO is buying stock in the company and I do not see that as a bad thing.
This stock does have some risks involved, and certainly is not one to invest heavily. The light trading is my biggest concern.
Sunshine Ahead For This 'Organic' Shadow Stock [View article]
Thank you for the comment and information. I was not sure of the extent or value of the Mascoma interest, so I decided to conservatively value it as did STKL.
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
Night Heron,
Good comment. I only know my own personal returns on my value-oriented portfolios. I did not adjust for inflation, nor for compounding. As I mentioned in the article, this is my personal experience. I doubt a study exists, but I will try to find one as that would be an interesting and informative article.
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
the rick,
Thanks for the comment and for reading my article.
I am sure I do not "get it" completely when it comes to technology, but do not be so sure that the elders in the market do not understand investing. I published a tip sheet before the internet and personal computers existed. It was in the Hulbert top 10, partly because of selections in options, which move very fast, then and now. I still play options, but selling them instead of buying them.
The difference between then and now is that I had a great advantage because I had to prepare manually point-and-figure charts for timing and thumb through Moody's volumes at the library to get fundamental information and news. If I worked harder than others at my DD and analysis, I could get an advantage, even though I had to "paste up" my newsletter, take it to the printer and send it by mail, which involved anticipating what the market would look like four or five days in the future as I wrote the newsletter. Nowadays, I could not get that advantage because in an hour on the internet any mediocre analyst can get info which is basically common knowledge. When everyone has the information, it is really not worth having for investment purposes.
I agree that the internet has provided a couple decades of great growth for the US, and our innovation has always pulled the US economy out of the doldrums. I am sure that will continue to happen...I just wish I could foresee what that innovation will be.
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
Windsun33
Interesting observation. I guess it could be said that the fact that the market has already made a $100 billion company out of Facebook may be signs of bubble mentality.
A Fresh Look At Energy Royalty Trusts In The Bargain Bin [View article]
Thanks for the pick. I will investigate this one. I like the dividend and the diversification of properties.
Incidentally, their office is 6 blocks from mine...maybe I will pay a neighborly visit.
Discovered: The Last Undervalued Apartment REITs [View article]
According to the latest report, the RAS occupancy rate is 90%, but that is a little lower than the others in this article. It does give room for improvement without adding more properties. I was unable to determine the class of the properties.
The dilution is a concern, but maybe the offering in March will be the last for a while.
Discovered: The Last Undervalued Apartment REITs [View article]
The losses in RAS are non-cash charges for mark-to-market security changes. This goes both ways and is variable for this kind of company. The operating income is positive and the net cash reported lately is positive...that is one reason they were able to raise the dividend after a long time without a change. RAS also has $10.78 in cash according to Yahoo, although we used the book value of $ 6.53, not the Yahoo value of $16.58, in our calculations, to even out the securitization effect and preferred stock.
All that said, we do look at RAS somewhat as a turn around stock.
Thanks for the comment.
Bottom Fishing In Crashed IPOs [View article]
Actually Yahoo identified Ebay and Amazon as the "peers" to CafePress. The idea was to indicate the profit margins, growth, etc. that are historic in the business. No knock on AMZN or Ebay, both of which obviously are very successful companies.
I also indicated some concern about the long-term viability of PRSS.
Bottom Fishing In Crashed IPOs [View article]
Cherry Picking 3 Cheap Oil Service Stocks [View article]
Actually that is pretty much how I see them myself. I am mostly a value investor, but I do pay attention to momentum.
I will check out your site.
Stan
Trans World Corporation: The Little Casino Stock That Could [View article]
I do not think you need to worry about TWOC...if you had read the article you would know that the company is small and the stock trades very thin. Today's listing on the OTC BB is a positive step in the right direction to help remedy that. It will give the company more exposure, and many retail discount brokers restrict trading in pink sheet stocks, but will allow trading in OTC BB stocks. This stock continues to move forward.
I do think you should be worried about the fact that LVS lost about 20% of its value in the last month or so. I also think that you should worry that it sliced through the 200-day moving average as if it did not exist, and now that has turned into overhead resistance. Today it dropped 3% off the 200-day average. LVS has the characteristics of a "falling knife," and its main growth driver is an economy that is questionable at best. The Shanghai and Hang Seng index have cratered, and these are considered leading indicators of the Chinese economy. We all hope for a "soft landing" for the sake of all markets, but stocks such as LVS will be affected more directly and quite negatively by the Chinese slowdown.
Pumping LVS on this comment section will not create a safety net under the stock where only air exists. No one knows where the bottom is, and the book value is $12. It is curious that you mention the "free cash flow" as I think you should also be worried that the "levered free cash flow," the actual cash that goes in the bank after debt service, is about $700,000 annually for LVS, according to YAHOO. Tiny TWOC has three times that in levered fee cash flow, and MGM, about 1/7th the size of LVS, has more than $1.2 billion. I never understand why companies think interest expense should not be considered in earnings and cash flow calculations...well, yes I do.
The philosophy of investing in the best of breed is sound, but is not without risk. People that jump on bandwagons also jump off pretty quickly. You may disagree with my philosophy of mixing in some small under-the-radar stocks that have obvious intrinsic value...it is a free country and I get one-cent for each of your comments.
TWOC is a real operation with good management and growing despite tough times. The China factor is just now being factored into the LVS stock price, The Euro factor is already figured into the TWOC price, so there is room for improvement. The main negative is the liquidity issue, but this is not a trading stock, and the company obviously is working on that by the OTC BB listing decision.
Good Luck
Beyond The Velvet Rope: 3 Enhanced Income Investments [View article]
Good comment. I encourage those with even speculative portfolios to add some strategies so that the entire portfolio can count on at least 2% in annual dividend income. It is amazing how much calmer we are about daily market fluctuations, knowing that the 2% is pretty reliable and competitive with fixed income investments.
Trans World Corporation: The Little Casino Stock That Could [View article]
It is clear that you have high expectations for LVS. A lot of investors do. My only comment is that it has a much higher PE than TWOC. I do not think that anyone invests in companies simply because they have a low PE or high book value, but those metrics do give us a clue as to how far the stock can fall when bad news hits, economies falter and investors become disenchanted.
If you think that generous government concessions to spur development are an indication that the government is your "best friend forever" you may be in for a rude awakening. I have been involved in international real estate development for 20 years and I see the same formula play out over and over: concessions, development, honeymoon period then added fees and/or taxes. Even governments that do not start with the strategic idea of adding fees later usually end up facing political pressure or changes to do so. This especially happens when the adjacent economy cools, real estate prices collapse and governments are accustomed to big revenue from the gambling sector...you should determine if Macua is heading for this scenario.
Other realities that are usually not considered:
--Costly bribes to officials, hidden as such things as "non-competitive awards to preferred suppliers."
--Mafia-style labor syndicates that shut down, or threaten to shut down, important operations unless the casino pays outrageous labor rates or, more likely, extravagant dues to the syndicate.
--Inevitable cost overruns on infrastructure projects that somehow are expected to be borne by the private developers...the bigger the project, the bigger the overruns.
I am sure that LVS has taken those into account in their business plan as they also have experience. The problem is that no one can identify exactly when those issues will surface, and the results can vary from small hits to the profit margins to alarming press releases. As I said, when that happens, it is good to know how far the price can fall. At least, TWOC is largely past those issues.
LVS and TWOC are for different types of portfolios, and really should not be competing for investment dollars. I actually like much about LVS, but I have clients that want to invest their Roth IRAs in small companies that their institutional and 401K funds are not looking at.
Good luck
Trans World Corporation: The Little Casino Stock That Could [View article]
Anything related to Europe has to be considered a contrarian play at this time. The Czech Republic, Germany and Austria are some of the most stable economies in that area, although you are right insofar as the growth rate there is mild compared to some emerging markets. Growth potential is not limited to country gowth, as growth can also come from a unique product, selective location, better business model, cultural changes, exchange uplisting, etc.
I am not overly excited about the hotel occupancy, but it is a relatively new hotel, operating in a difficult economy. It is showing progress and profitable, so there is plenty of room for growth here also.
One point of this article is that casinos anywhere are subject to special government regulation and taxes, as well as the whims of the local economy, and TWOC has experienced the worst of those influences and still has produced double-digit growth. That shoe remains to fall in some of the other more touted operations in emerging markets. I have worked internationally for 20 years and can tell you that despite all the government assurances to spur development, once the profits start rolling in the government stricks its big hands out for a cut.
Finally, valuation is not limited to growth prospects. Casino and hotel companies are in some ways real estate developers. That is why many REITs are involved in the hospitality market. If TWOC were to be valued as a REIT and paid out the levered free cash flow to investors, it would be valued at $5 and have a 6% dividend. The company chooses to reinvest free cash flow in expansion opportunities. One 77-room, four-star hotel would cost at least half the company value to build.
The CEO is buying stock in the company and I do not see that as a bad thing.
This stock does have some risks involved, and certainly is not one to invest heavily. The light trading is my biggest concern.
Thanks for the comment and reading my article.
.
Sunshine Ahead For This 'Organic' Shadow Stock [View article]
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
Good comment. I only know my own personal returns on my value-oriented portfolios. I did not adjust for inflation, nor for compounding. As I mentioned in the article, this is my personal experience. I doubt a study exists, but I will try to find one as that would be an interesting and informative article.
Thank you for reading my article.
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
Thanks for the comment and for reading my article.
I am sure I do not "get it" completely when it comes to technology, but do not be so sure that the elders in the market do not understand investing. I published a tip sheet before the internet and personal computers existed. It was in the Hulbert top 10, partly because of selections in options, which move very fast, then and now. I still play options, but selling them instead of buying them.
The difference between then and now is that I had a great advantage because I had to prepare manually point-and-figure charts for timing and thumb through Moody's volumes at the library to get fundamental information and news. If I worked harder than others at my DD and analysis, I could get an advantage, even though I had to "paste up" my newsletter, take it to the printer and send it by mail, which involved anticipating what the market would look like four or five days in the future as I wrote the newsletter. Nowadays, I could not get that advantage because in an hour on the internet any mediocre analyst can get info which is basically common knowledge. When everyone has the information, it is really not worth having for investment purposes.
I agree that the internet has provided a couple decades of great growth for the US, and our innovation has always pulled the US economy out of the doldrums. I am sure that will continue to happen...I just wish I could foresee what that innovation will be.
The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]
Interesting observation. I guess it could be said that the fact that the market has already made a $100 billion company out of Facebook may be signs of bubble mentality.
Thanks
Why Nobody Is Talking About Social Security [View article]
I hear you, brother.
I was actually surprised in the chart of solutions prepared by the Congressional Budget Office that there was no mention of eliminating abuses.
Stan