Chris DeMuth Jr.'s  Instablog

Chris DeMuth Jr.
  • on Technology
  • on Services
  • on Conglomerates
Send Message
Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
My blog:
Rangeley Capital on Harvest
My book:
Rangeley Capital Best Investment Ideas
  • What Wall Street Thinks About Gramercy Property Trust 4 comments
    Dec 24, 2013 8:14 PM | about stocks: GPT

    2013 has been a year of increasing Wall Street interest in Gramercy Property Trust (NYSE:GPT). Mitch Germain, a Director at JMP Securities, initiated coverage with a "market outperform" rating and a $6 price target. Compass Point's Co-Director of Research Wilkes Graham launched coverage with a "buy" rating and a $6.50 price target. According to Graham,

    We are initiating coverage on shares of GPT with a Buy rating and a $6.50 price target. Over the course of the past 15 months, the company has exited the esoteric and risky CDO business, hired an institutional quality management team aimed at transforming the company into a world class office & industrial focused triple net REIT with an asset management arm, changed its ticker from GKK to GPT, and acquired $380M in triple net leased assets at a 9% cap rate with no material debt maturities or lease expirations for the next several years. GPT should go current on its preferred in 4Q13 and commence a common dividend in 2014. If management can continue to acquire $300M/yr at 8.5% cap rates, a $0.40 annualized dividend by 2015 is achievable. We value the stock on this expected dividend, on current NAV, and on AFFO and arrive at an average valuation of $6.50 per share which represents nearly 50% upside from the current stock price excluding any common dividends.

    CJS Securities research analyst Jason Ursaner started with a "market outperform" rating and also has a $6.50 price target. All of these price targets strike me as conservative. In the months ahead, it is reasonable to expect these analysts to raise their price targets to the $7.50-8.50 range. I decided to invest over ten million dollars in this company at a time when there appeared to be far more reputational risk in doing so. However, once they are current on their preferred and are paying a dividend, both the market price and Wall Street analysts will begin to reflect a lot more comfort in associating with GPT.

    Stocks: GPT
Back To Chris DeMuth Jr.'s Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
    , contributor
    Comments (101) | Send Message
    Thanks, Chris and Merry Christmas!
    25 Dec 2013, 06:46 AM Reply Like
  • HFI
    , contributor
    Comments (1783) | Send Message
    Well done Chris.
    26 Dec 2013, 08:38 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11477) | Send Message
    Author’s reply » A Ladenburg Thalmann analyst added his voice to the mix with a $7.50 price target.
    17 Jan 2014, 12:37 PM Reply Like
  • Biological
    , contributor
    Comments (1921) | Send Message
    Some guys get all the luck (not!). More like intuition, common sense (actually, uncommon) and hard work! I've had a great run up on GLOG this year, yes - due to my own research for once (!) - but GPT, thankfully, is my second runner up in 2014, so far. Thanksalot. Kind regards.
    17 Jan 2014, 07:31 PM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Most Commented
  1. Archived GCVRZ Forum ( Comments)
  2. GCVRZ Forum Archive ( Comments)
  3. Event Driven Q&A Forum ( Comments)
  4. GPT Forum ( Comments)
  5. Shorts Forum ( Comments)
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.