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Newcastle Investment with 40M share secondary

  • The underwriter greenshoe is for 6M shares (subject to the coming 1:3 reverse split). The proceeds will be used to add to Newcastle's senior housing holdings.
  • Source: Press Release
  • NCT -4.2% AH
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Comments (9)
  • clf99
    , contributor
    Comments (38) | Send Message
     
    This increases shares outstanding by 11.4%. Does that mean the price will drop by 11% as well?
    12 Aug, 04:53 PM Reply Like
  • gators
    , contributor
    Comments (733) | Send Message
     
    They needed a reverse stock split because the senior housing spinoff will probably be two thirds of the company and two thirds of the dividend like NRZ was and so you will have New Senior at about an 8 dollar share with a 6.5 cent dividend and NCT as a four dollar share with a 3.5 cent dividend or something close to that. NCT will have income streams from it's holdings in the CDMO's and it's interest in NRZ, New Media, and one New Senior. Watch out. New Golf is coming next.
    12 Aug, 07:29 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5582) | Send Message
     
    I'm expecting that (NYSE:NCT) will eventually spinoff its golf business.
    12 Aug, 08:51 PM Reply Like
  • fire0nice228
    , contributor
    Comments (32) | Send Message
     
    Typically NCT recovers quickly from these offerings? They have to do them in order to generate the cash to buy new properties or other such investments, correct?
    12 Aug, 08:22 PM Reply Like
  • gators
    , contributor
    Comments (733) | Send Message
     
    NCT is the official dumping ground for it's parent, FIG ( Fortress Investment Group). They are opportunistic at buying distressed assets at a discount and monetizing them. They are really quite good at what they do. NRZ has Been a hit for them, New Media went up over 25% from the spin off price and I think that New Senior will be a home run. I originally bought NCT around seven because I liked the excess MSR's that eventually became NRZ. I think if you listen to their conference call, that all these spin offs and dividends translates to a 15 dollar plus which for me is over a double. The reason I think New Senior will be a home run is that it is 95% private pay unlike a lot of other health care REITS like OHI. Given the high dividend rate, I expect the stock price to appreciate to ink line with more established medical REITS to in the 6% range which means a 50% price appreciation in the stock price once it settles in and becomes in line with it's peers. That means that New Senior will be at 12 and you still have NCT at 4-5, with Golf as a. Potential other spin. The only big drawback is that as NCT keeps shrinking itself, additional equity will have to be raise as evidenced by the new private placement announced today. However, that is not all bad if it is put to work in a way that is accretive to earnings. I like this company and am enjoying the ride. Gators
    12 Aug, 09:30 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5582) | Send Message
     
    Agree. According to my speadsheet (I keep track of my holdings/buy&sells), the total profit from (NYSE:NCT), (NYSE:NRZ), and (NYSE:NEWM) plus the dividends is about equal to what I paid to buy (NCT). Specifically, without the dividends, I have a profit on (NCT) and (NEWM). (NRZ) is flat, with all profits coming from the dividend. I do not reinvest the dividends.
    13 Aug, 09:37 AM Reply Like
  • sobay5some
    , contributor
    Comments (15) | Send Message
     
    Thanks for sharing these comments. With all these recent spin out activities, it is getting a bit confusing.
    13 Aug, 01:11 AM Reply Like
  • fire0nice228
    , contributor
    Comments (32) | Send Message
     
    I too get confused at times but one thing I do know is I hold NCT and NEWM in a retirement account and can reinvest dividends without problem. Just letting it ride and DRIP for now.
    13 Aug, 10:24 AM Reply Like
  • Flave
    , contributor
    Comments (29) | Send Message
     
    I've been in NCT for about 5 years. The benefits have been impressive. Management appears to be very sharp at all levels. Golf could turn out to be a home run, in the very long term. The price is right for a lot of golf courses today.
    16 Aug, 05:49 PM Reply Like
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