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  • Fortress Investment Group: Time To Storm The Castle [View article]
    Was looking to add: Jumping the gun slightly (I prefer to see 2 closes above/below a technical level to confirm a break), but Fortress Investment group (FIG) looks like it's now clearly broken $3.12-18 resistance zone. Just as good a level as any to add - I've increased my FIG stake to 3.5%.

    Trinity Biotech (TRIB) recently broke higher also - though in that case I was looking for that technical level to trim my stake - see here:

    http://bit.ly/LSlzJB

    In fact, Asta Funding (ASFI) and Colony Financial (CLNY) both seem to threatening a break higher also, so keeping a close eye on them also - not sure what that says about the broader US market...?!
    Jun 28, 2012. 03:28 PM | Likes Like |Link to Comment
  • A Diagnostic Update On Trinity Biotech [View article]
    That's what I like about TRIB - it's at a price that's still sensible for value or buy-and-hold investors, but also exhibits strong growth characteristics and is in a sector that could get growth & momentum investors v excited at some point (perhaps soon)...
    Jun 25, 2012. 12:41 PM | Likes Like |Link to Comment
  • Fortress Investment Group: Time To Storm The Castle [View article]
    Yeah, that's a $64,000 question. If we see more foreclosures, legal issues, and of course regulatory changes/uncertainty who wd that affect more? If would certainly impact (long or short-term?) the margins of the servicer, but it might or might not affect the actual value of those MSRs, depending on circumstances.

    Also, my long-term perspective is that MSRs may be revalued dramatically higher once the current wave of bank selling subsides (and then, of course, when interest rates eventually begin rising). A 'pure play' owner of MSRs might be the better way to play that...

    This might perhaps bias me to Newcastle, but that's no real prediction - I'd have to do a lot more research, and I haven't even analyzed/compared their respective valuations. For the moment, Fortress looks like the much more accessible & easily understood investment play, with a great margin of safety & plenty of upside.
    May 31, 2012. 01:21 PM | Likes Like |Link to Comment
  • American Realty Capital Trust: A Compelling Growth And Income Play [View article]
    I've no idea if the 'negative' comments above are grounded in fact...but then again, I don't need to!

    Any management who's ever been involved with a non-listed REIT is not anybody I'd ever deal with - who needs that kind of 'pedigree'..?! I'm sure the same ethics & treatment of shareholders shows up when they migrate to the listed REIT space - just in a different way!

    Remember, a lot of these REITs are not about investors buying a genuine bargain, it's actually about promoters selling a story that's designed to titillate the interest/excitement of a specific universe of investors. Many of these will end in tears...

    I call the top on all this whenever the 'gentlemen' from Apple REIT Companies get around to launching a listed REIT..!
    May 31, 2012. 11:06 AM | Likes Like |Link to Comment
  • Fortress Investment Group: Time To Storm The Castle [View article]
    Interesting - I've been thinking about that - I need to do a lot more research on MSRs, but Nationstar looks like an MSR pure play opportunity..! More generally, this question includes all types of other situations, including PE fund managers, spin-offs, holding companies etc.

    I think it will always come down to valuation & diversification: If one company's far cheaper and/or safer than the other, I think that presents an easy choice.

    If they both have attractive valuations, then you should evaluate their level of diversification or correlation. Sometimes they're v different so no reason you can't buy both, but in many cases they are correlated even if it's just on a market sentiment basis. Buying both would then be a more concentrated bet - nothing necessarily wrong with that, but I would usually prefer to make a choice and use the remaining cash for another attractive, but less correlated, stock pick.

    This approach is reflected elsewhere in my portfolio. Obviously, I like all my stock picks to have good upside potential, but it's equally attractive to add a stock with low correlation or, even better, that can act as a natural hedge (e.g. I usually hedge Ryanair (RYAAY) with oil stock holding(s)) within my portfolio.
    May 31, 2012. 08:26 AM | Likes Like |Link to Comment
  • Fortress Investment Group: Time To Storm The Castle [View article]
    Yeah, Eurocastle is a hopeless cause..!

    I wouldn't entirely blame Fortress for this. Remember those 'innocent' pre-07/08 years: Absolutely everybody bought into the insanity at the time that loading up property companies with 70, 80 even 90% debt was perfectly normal & offered huge rewards..! Oh, er, there's still some US REITs doing that... ;-)

    There were plenty of German (& other) property companies launched in London at the time, and most have now been taken-over, delisted or bankrupt, or are trading for mere pennies. Sirius Real Estate (SRE:LN) is compelling though.

    Fortress' other German vehicle, Gagfah (GFJ:GR), is pretty interesting though, and offers plenty of upside - it's on my potentials list, but I'm invested elsewhere in German residential property.
    May 30, 2012. 10:48 PM | Likes Like |Link to Comment
  • Fortress Investment Group: Time To Storm The Castle [View article]
    Thanks - good to hear! Another reader also highlighted the value of Nationstar (I think Fortress still owns 80%).

    It's not something I track actually - remember, Fortress currently manage $46 billion, and about 98% of that is external capital. Any single portfolio holding will inevitably be a fairly small % of their AUM, so it's difficult to arrive at any (meaningful) read through to Fortress' bottom line.

    That's not to say you should ignore portfolio company news, they are still good report cards on Fortress - I find the current newsflow regarding MSRs and Nationstar/Newcastle & Fortress fascinating and a good sign for future returns on AUM.
    May 30, 2012. 10:28 PM | Likes Like |Link to Comment
  • Avon Products: Lots More Lipstick Needed [View article]
    Any serious buyer, and the banks/institutions funding them, will have no time for adjusted earnings, management commentary, etc. Projected revenues/earnings will, of course, be relevant, but the main focus will be on existing AVP debt and cashflows. That makes it very difficult to justify current share price or potential bid price.

    Yes, of course, Avon should logically be able to earn a 15-20% operating profit margin - and equally I should be a billionaire by now...but the current reality is that neither of those scenarios is near to being realized today!

    Any buyer may possibly hope to see that kind of enhanced margin eventually, and may even have a v specific plan to achieve it, but the last thing they will want to do is award too great share of that unrealized/risky potential with AVP, rather than their own, shareholders...
    May 7, 2012. 04:50 PM | Likes Like |Link to Comment
  • Avon Products: Lots More Lipstick Needed [View article]
    Thank you - you're quite correct! While entertaining, I didn't intend to focus on gossip/rumours in this article, but couldn't resist mentioning another possible bid simply because it flashed up in front of me on the web or TV as I writing. I swear they spelled it Richemont! But my apologies - I think everything else is triple-checked, but dd's a good idea even on a throw-away media rumour.

    Incidentally, that reminds me there was a big rumour L'Oreal was going to bid for Avon a year or two ago. It even moved the share price if I recall. Didn't make much sense to me, and it faded away like most rumours.
    May 7, 2012. 04:18 PM | Likes Like |Link to Comment
  • Avon Products: Lots More Lipstick Needed [View article]
    That is in my data file (just contact me if you want a copy), but outstanding AVP shares were at 451 mio in 2005 vs. 431 mio at end-2011.

    The debt is mostly 'public', in the sense that it is primarily bonds & commercial paper, not bank debt. I would presume the usual institutional investors in corporate debt are holders of Avon bonds also.
    May 7, 2012. 03:59 PM | Likes Like |Link to Comment
  • Cresud's Value Is Anchored In Real, Attractive Assets [View article]
    From my recent link above, you'll see I actually eliminated my CRESY position.

    I've mentioned before I believe real assets tend to offset the impact of inflation and/or currency depreciation over time. Therefore, when I originally bought CRESY, I wasn't that hopeful on the USD/ARS rate but it didn't concern me too much.

    At this point though, the attractiveness of the stock valuation or the underlying property/farmland exposure is, I think, irrelevant - market sentiment, government actions, and increasing isolation/accessibility are far more important. Therefore, I've lost all appetite for CRESY for the moment, unless I see a v substantive change/improvement in government's stance & underlying financials - and that's not likely to happen in the short/medium term..!
    May 7, 2012. 11:12 AM | Likes Like |Link to Comment
  • Cresud's Value Is Anchored In Real, Attractive Assets [View article]
    Considering the YPF debacle, here's my conclusion now re the CRESY stake in my portfolio:

    http://bit.ly/IUzBOn
    Apr 17, 2012. 01:56 PM | Likes Like |Link to Comment
  • Shopping For Steady Growth With Urstadt Biddle Properties [View article]
    Book Value and Net Asset Value per share are interchangeable with most companies/shares these days. Not really my point anyway, if Balance Sheet Values and Equity are understated, it won't affect my Fair Value assessment ultimately - since Return on Equity should therefore be much higher, paying an appropriate premium will be justified.

    I'm considering buying another property company - here are its stats: (I would tend to average out RoEs for both companies):

    Liabilities/Assets: 37%
    RoE (Op CF less Capex basis): 3.9%
    RoE (Net Income basis): 10.7%
    Dividend Yield: 5.5%
    Price/Book: 0.84

    By comparison, here are Urstadt's:

    Liabilities/Assets: 58%
    RoE (Op CF less Capex basis): 15.8%
    RoE (Net Income basis): 7.6%
    Dividend Yield: 5.3%
    Price/Book: 2.35

    Which do you prefer/think is cheaper?


    Apr 13, 2012. 12:24 AM | Likes Like |Link to Comment
  • American Realty Capital Trust: A Compelling Growth And Income Play [View article]
    Let's compare two companies:

    Company A:

    Liabilities/Assets: 34%
    RoE (Op CF less Capex basis): 5.3%
    RoE (Net Income basis): (2.7)%
    Dividend Yield: 6.4%
    Price/Book: 1.50

    Company B:

    Liabilities/Assets: 37%
    RoE (Op CF less Capex basis): 3.9%
    RoE (Net Income basis): 10.7%
    Dividend Yield: 5.5%
    Price/Book: 0.84

    Which would you buy..?
    Apr 12, 2012. 11:48 PM | Likes Like |Link to Comment
  • Shopping For Steady Growth With Urstadt Biddle Properties [View article]
    It's interesting how US property companies never seem to 'advertise' their NAVs - I wonder why..?! Look pretty much anywhere else in the world, and it's the number 1 metric quoted by companies, and focused on by investors.

    A global search will also throw up countless companies which enjoy the same returns, the same growth prospects, the same leverage - all for ridiculously cheaper prices than UBA (and many other US REITS - and MLPs! - so you have a point about relative value in the US).

    NAV's easy to get to - latest Equity is $299.8 mio, but you have to strip out $61.25 mio of Preferred to get to Common Equity of $238.55 mio. With 29.805 mio Common Shares outstanding, that equates to an $8.00 NAV.
    Apr 12, 2012. 10:56 PM | Likes Like |Link to Comment
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