American Realty price target cut at BofA


"We're gaining confidence in David Kay's (expected to be CEO by the end of they year) ability to continue to address concerns and build investor confidence, including adding personnel to financial reporting," writes Bank of America, reiterating its Buy rating on American Realty Capital Properties (ARCP -2.3%), but lowering the price target by a quarter to $15.25.

Recent positives: Deleveraged the balance sheet, sold the shopping center portfolio, and internalized management.

Investor concerns? Activist rumblings at American Capital

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Comments (16)
  • Techbug
    , contributor
    Comments (128) | Send Message
     
    In light of Mr. Schorsch's proposed compensation package and controversies surrounding it, why is BAC is talking about Mr. Kay becoming CEO? Is Mr. Schorsch's compensation as CEO for the next several years now scrapped?
    11 Jun 2014, 01:17 PM Reply Like
  • Patent News
    , contributor
    Comments (1460) | Send Message
     
    anyone buying shares here or waiting for it to go lower?
    11 Jun 2014, 01:28 PM Reply Like
  • EarningsMarq
    , contributor
    Comments (58) | Send Message
     
    Please this price is outrageous. As a real estate professional the market is punishing them unjustly. Not sure I would have bought the red lobster portfolio but I am also not too worried with how big ARCP is. Go LONG here. The valuation for ARCP is so incredibly low compared to their competitors. Plus the balance sheet really isn't too bad.

     

    Ask yourself this-- can I hold the REIT for more than a year? and do I think it will exist in 1 year? If so you should go LONG and not worry what CNBC or the other sensationalists have to say
    11 Jun 2014, 02:15 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3426) | Send Message
     
    It's tempting to wait and see what they deploy capital on next, since they just raised about $1.6b to do *something*.

     

    I just wonder if they'll raise equity at $11 next, and then $10? The market is punishing them because they broke a promise to shareholders and issued equity too low, which just dropped the pool of buyers immensely. Read SA comments - so many won't touch them now, because they don't trust management. Even some huge funds are considering pulling out if they don't smarten up.

     

    Doesn't mean they won't rebound, though - just means you have to ask, "when"?

     

    -Mike
    11 Jun 2014, 02:31 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2855) | Send Message
     
    I have DRIP set up so I'm adding each month to the position. I didnt think it would go much lower when I got in around $12.50, so the fact its down here is a bit of a shock to me. I also think it should probably trade around $15, but we're a long way from there.

     

    Agree with EarningsMarq - as someone involved in the industry, I think the market is being too hard on ARCP. Also not a huge fan of the RL deal, but it is what it is I suppose. I'm planning on holding it for a number of years, so it has a long time to move higher, and the reinvested dividends help smooth things out, and compound the yield.
    11 Jun 2014, 02:50 PM Reply Like
  • B4ngZ00m
    , contributor
    Comments (159) | Send Message
     
    I'll average down if it gets closer to $11. It'll rebound providing they don't decide Radio Shack would make a great follow-up to Red Lobster.
    11 Jun 2014, 03:25 PM Reply Like
  • jsteinm1
    , contributor
    Comments (161) | Send Message
     
    There has been long term support for this stock at $12, with an intra-week piercing that support down to $11.50 or so a couple years back. My best guess is today or tomorrow will be the low point for some time to come. Long.
    11 Jun 2014, 03:58 PM Reply Like
  • Curtlevy
    , contributor
    Comments (46) | Send Message
     
    Yes, this is the only place to get triple net lease property at 8%.
    Check Realtor websites and look at the cap rates.
    11 Jun 2014, 06:05 PM Reply Like
  • embryorambo
    , contributor
    Comments (281) | Send Message
     
    Agreed but just when i think the valuation will not go any lower it does. Its down a full 5% in 5 days on no real new news. REIT's typically do not have this much volatility pull up the chart and this stock fluctuates wildly for what its underlying assets are.
    11 Jun 2014, 07:53 PM Reply Like
  • COBeeMan
    , contributor
    Comments (2933) | Send Message
     
    I agree that it will not stay under $12 for long. I'm buying lots under $12 in various portfolios.
    12 Jun 2014, 11:31 PM Reply Like
  • yblarrr
    , contributor
    Comments (1173) | Send Message
     
    Burn me once shame on them, burn me twice and shame on me,I am OUT!
    11 Jun 2014, 02:43 PM Reply Like
  • skeeziks
    , contributor
    Comments (2) | Send Message
     
    yblarrr - my sentiments exactly. when the new CEO is in i'll recheck ARCP, but i wouldn't touch it with a 10 foot pole with Schorsch running things.
    11 Jun 2014, 06:30 PM Reply Like
  • abujordan
    , contributor
    Comments (153) | Send Message
     
    Bought in yesterday at $12.15.

     

    http://seekingalpha.co...
    11 Jun 2014, 07:54 PM Reply Like
  • embryorambo
    , contributor
    Comments (281) | Send Message
     
    EVP picked up 88k in shares today at 11.80. Not a whole lot for what he gets paid but he did increase his position in the company a full 33%. To me that is a step in the right direction. Like when company insiders are in the same boat as i am. Wish we could see more of this and less of lucrative comp packages being thrown around by the board
    11 Jun 2014, 08:04 PM Reply Like
  • EarningsMarq
    , contributor
    Comments (58) | Send Message
     
    Tell me where else in the market you can get an 8.3% yield with this level of risk? People are so short term focused
    12 Jun 2014, 09:53 AM Reply Like
  • Union Trade Assoc
    , contributor
    Comments (1151) | Send Message
     
    At current price the shares are now trading at a third of they're previous daily volume. No one knows and the Company will not explain why they suddenly ceased the Spin-off of the Retail Centers ( a good move ) which deleveraged the balance sheet for RED LOBSTER ( a bad move ) and then sold New Equity at
    $ 12.00 a share - setting the current valuation themselves.

     

    If it were not for the 8 percent Yield & Insider Purchases of the stock in particular, I would suggest quite strongly No Retail Investor would buy into this Company. Funds from the sale of Equity are being used to pay the Dividend.

     

    If you are Holding these shares, you are awaiting a miraculous announcement of an Acquisition so large as to create a Quarterly Earnings Surprise.

     

    There have been No New Articles on S & A by the Real Estate Expert who was Positive the Company for Months, Article after Article.

     

    Look for the Sale of Cole, a Reduction in the Dividend, a Sale of most of the R.L. Properties, a New CEO ... and the Shares may move up in time. Right now, it's worse than Dead Money.
    Hope the Funds don't begin to Sell their Holdings
    18 Jun 2014, 12:16 PM Reply Like
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