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Tim McPartland

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  • Are Lower Tax Preferred Stock Dividends Really A Better Deal? [View article]
    Thanks for the article Doug of a very much talked about topic.
    Dec 2, 2014. 10:24 AM | Likes Like |Link to Comment
  • Hi-Crush Partners In A Low Oil-Price Environment [View article]
    Casey thanks for the article.

    My biggest concern with frac sand is there is no technical insulation whatsoever in the production of sand. The biggest insulation for a producer is securing the necessary permitting to mine, but production is being added monthly in Wisconsin and Minnesota, as well as around the country and we will reach the point of overproduction before long (a couple years). Contracts can insulate you for a while, but as they expire and simultaneously production rises we are going to see falling prices and very tight margins.

    Bottom line is for the long term position I have to pass of Hi Crush.
    Nov 26, 2014. 11:50 PM | 1 Like Like |Link to Comment
  • Why Is Mr. Market Raining On This Small-Cap Farming REIT? [View article]
    Hi Brad---BMO should do a little fact checking as their land valuations are in fact 'mangement estimates', which they have stated in all of their filings etc. This is one of the problems I have had with this since day 1. .

    This from their latest prospectus for common shares.

    We did not obtain a fairness opinion in connection with the FP Land Merger. The amount of consideration paid by us to Pittman Hough Farms, in which Paul A. Pittman has a 75% controlling interest, in the FP Land Merger was based upon Messrs. Pittman and Fabbri's estimates of the fair market values of the properties that comprised our portfolio upon the completion of our initial public offering and the outstanding indebtedness of our Predecessor. The estimates of the properties' fair market values were based on various factors, including assessments of comparable farmland in each of the markets in which the properties are located and publicly available records of farmland sales.

    Since a couple days ago I have done more digging trying to verify statements made by management etc---I have found some very interesting information, but none that I would write about in public until I could do 'in person' due diligence in Nebraska and Illinois--and the odds of that happening are maybe only 25%.

    Best regards and have a happy and restful Thanksgiving.
    Nov 26, 2014. 02:21 PM | 1 Like Like |Link to Comment
  • Why Is Mr. Market Raining On This Small-Cap Farming REIT? [View article]
    tuliptown--I believe you are generally correct. I was doing some work for a guy who had a 80 acre parcel of decent land he was renting out for $100--just because the guy 'took good care of the land'.

    My point is really that for each acre leased the claim is very top of the rent possibilities--if you are renting for $400 there is no money to be made and likely rents are coming down (assuming no crop failure in South America).
    Nov 23, 2014. 07:05 PM | Likes Like |Link to Comment
  • Why Is Mr. Market Raining On This Small-Cap Farming REIT? [View article]
    Hi Brad--thanks for the thought provoking article---you certainly have brought out lots of opinions on this one.

    I will say you have caused me to spend a couple hours researching further to see if I missed something on this one.

    It may be helpful to readers to read the letter from the company to the SEC prior to the IPO.

    Additionally many of the questions arise from the rents they are claiming to be garnered on their land. They are not reasonable--since I work in this area I had to dig further. The USDA publishes a county by county (nationwide) average rents spreadsheet--with the most recent one being published in September and shows dry land prices and irrigated acres. Whiles averages of anything don't in and of themselves mean much, they are an indication that the claimed rents may be very much out of line. This is a huge file.

    Additionally the extension services of the Iowa and Illinois publish detailed data on the cost of a crop (inputs) with various assumed results. Iowa has just published theirs and the results are interesting--even with a decent crop corn has been quite a loser (without forward selling) this year.

    Additionally where they really lost me was they had previously made a claim that their land in Nebraska (Butler County) was worth 13,000/acre. We had to check that out since I believe Iowa or Illinois land may have hit that area, I don't believe Butler county ever remotely reached this level. I checked about 50 parcels from all over the county at the assessors office (online). The highest value that I found was around 6,000/acre (this was a double from 5 years previous--and included dry ground and irrigated). Now working in this area daily I know assessor values can be way off--but typically they are not more than 5-10% off on residential and ag lands (commercial is a different story as I am sure you know better than I), except when values are spiking or dropping like a rock--they lag these big moves. These value gains compare well to those thoughout the midwest. Now a $13,000 claim makes me want to jump in the car and drive to Butler County (a 6-7 hour drive) to inspect files and parcels first hand. Just too much 'puffed up' talk with this one. Here is the Butler County GIS site where one can survey the county and values.

    BUT I do agree that farmland bought right is a super VERY long term investment.

    Take care and keep up the good work.
    Nov 22, 2014. 01:21 PM | 2 Likes Like |Link to Comment
  • Our Favorite Conservative Preferred Stock - Tortoise Energy Infrastructure [View article]
    Larry--not elusive at all. I have a regular 40-60 hour a week job and my website is something I do 'as a hobby'.
    Nov 21, 2014. 02:10 PM | Likes Like |Link to Comment
  • Our Favorite Conservative Preferred Stock - Tortoise Energy Infrastructure [View article]
    Hi Larry--sorry -- time is something I don't have so have not been around seeking alpha.

    I think by now you know I have moved away from many perpetual preferreds into securities with shorter durations--I plan to stay with that course. I do own some junkier issues like LTS-A--but I think it is actually a relatively safe issue.

    I will NEVER sell TYG-B--it is important to my accounts as I was buying it in truckloads when it was in the lower $8's--a nice current yield at that time and agreat YTM, but most of all I want the AA rating.
    Nov 21, 2014. 02:08 PM | Likes Like |Link to Comment
  • Why Is Mr. Market Raining On This Small-Cap Farming REIT? [View article]
    Brad--I think you drank the kool-aid on this one--although I do believe that over the VERY long term (maybe 10-20 years) farmland is a buy. Certainly the rents that have been charged recently are not sustainable under current commodity pricing--the inputs (seed, nitrogen etc) are simply too high today to pay rents that they are claiming. Today cash corn at our local elevator is 3.39/bushel. That being said any farmer of size sold 50% of the current crop at much higher prices, but selling the futures--whether it be oil or corn works for a year, but if crop prices stay low this option goes away to a large degree. Prices will be a function of global crop conditions--so we will see what happens in Brazil this winter.

    I am surprised they are paying the dividend they are paying given their FFO or AFFO (on a fully diluted basis). Doesn't really make sense in the face of low crop prices.

    It is likely that no matter the price I couldn't buy shares of this company--the officers seem like 'operators' to me (as in financial operators)--their commentary doesn't strike me as people that know much about farming.

    It will be fun to watch this play out in the years ahead.
    Nov 21, 2014. 01:16 PM | 3 Likes Like |Link to Comment
  • This Self-Directed Hospitality REIT Isn't So 'Super' [View article]
    Hi John--I wrote on SPPR exactly 3 years ago and the story was not much different then.

    A buyout probably makes little sense as the assets have been overvalued on a continuous basis.

    Entrenched management is the problem and with a small REIT like this it best makes sense to just liquidate and start over.
    May 14, 2014. 01:43 PM | 2 Likes Like |Link to Comment
  • Farmland Partners IPO Offers Investors Unique Opportunity To Own Farmland [View article]
    There is not one bit of this deal that should be attractive to any investor---including the $400,000 salary paid to the chairman for managing what is a very minor bit of farm land.

    I covered this on my website about 2 weeks ago and cover the negatives--not the positives of the offering as there are NONE. The claimed rents are unbelievable given that corn was selling as high as $8.50/bu a year ago and now it is $5/bu. A simple calculation makes these rental claims so silly that I laugh out loud.

    The author is correct that this would be the first REIT in row crops, but Gladstone Land (ticker:LAND) has been operating for a year with ag land in CA, AZ, FL etc and their financials are terrible. They started off immediately paying a .12/share distribution and have cut that to .03 already.
    Apr 5, 2014. 07:30 PM | 1 Like Like |Link to Comment
  • Supertel Hospitality Preferreds Trade At Large Discount [View article]
    Neither of these make SuperTel a reasonable REIT investment. With a REIT like this why would an investor like Elzstain invest here when he could actually start a brand new REIT from the ground floor if he wanted to be in this space so bad.

    The purpose of a REIT is to generate tax efficient cash flows with which to pay the investors a decent rate of return. It is more than obvious that sppr hasn't done this for 6 years and if they are unable to generate huge amounts of cash (I'm talking 50 million or more) they will simply not generate enough free cash to fulfill the purpose of a REIT.
    Mar 3, 2014. 05:35 PM | Likes Like |Link to Comment
  • Supertel Hospitality Preferreds Trade At Large Discount [View article]
    The continuation of the business doesn't make economic sense. Their assets are junk--have been all along. The newer properties they have bought to institute their turnaround plan are already on a downward slide.

    They have overstated their asset value every step of the way. Infusions of cash have done nothing. Why wouldn't you simply liquidate? If in fact the asset values are as stated everyone should be happy. This may well be the worst managed REIT of all times.

    When the shares were selling at a split adjusted value of $11 3 years ago we wrote on article on Seeking Alpha--it is now at $2.50.

    It has had a failed offering after a 1 for 8 reverse split that only a fool would have advised as a course of action.

    For Elstein to be involved makes no sense---if the assets are worth what they claim liquidate.
    Mar 2, 2014. 10:32 PM | 4 Likes Like |Link to Comment
  • Is Omega Healthcare's Risk In Government-Based Income Overstated? [View article]
    Hi Fidelity--in the simplest terms---taxable income is just that (net income like any corporation)---this is the number they must pay 90% of to holders.

    FFO (funds from operations) in its simplest terms is net income plus depreciation---thus a larger number than taxable income.

    A simple example----Public Storage (ticker:PSA) had net income in 2013 of 1.06 billion -- they had depreciation of 430 million. This gives FFO for all equity holders of around 1.5 billion. PSA breaks down a bit more by subtracting preferred dividends of 204 million to give a FFO for common holders of about 1.3 billion.

    So in this example PSA must pay out 90% of 1.06 billion and in fact they paid out 884 million to common holders and 204 to preferred holders (all are equity holders). Thus they paid out over 100% of net income in distributions.

    On a FFO basis they paid out only only around 71%---so unlike most REITs they have plenty of leftover cash in the till for other things like acquisitions.

    Funds available for distribution is FFO minus some miscellanous expenses like non cash comp and maintenance capital (thus a slightly smaller number than FFO).
    All this data is here.;highlight=
    Mar 1, 2014. 02:11 PM | 2 Likes Like |Link to Comment
  • A Preferred Bond Replacement Strategy For Intelligent REIT Investors [View article]
    I think it would be correct to say REIT common shares have the 'potential' to appreciate, while the preferreds have minimal appreciation potential at this point in time (most investors would buy the preferreds for income versus appreciation). It would be incorrect to say the regular shares pay a higher dividend--with the exception of some mREITs the preferreds pay higher dividends. Here is our list of all REIT preferreds -

    There are some very good yields out there--of course you have interest rate risk.
    Feb 24, 2014. 04:59 PM | 3 Likes Like |Link to Comment
  • Disaster Strikes For Boardwalk Pipeline Partners [View article]
    Last year they decided to monitize their base gas (the cushion in storage meant to be permanent to provide pressure). They should have known and made it clear to investors that this would affect future revenues. Someone at the top should do the honorable thing and fall on their sword.
    Feb 10, 2014. 06:26 PM | 1 Like Like |Link to Comment