Gramercy Capital Corp. (GKK)
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- General Discussion on GKK
- CACC: Recent Events Add to the Short Thesis [view article]
- 12 Stocks Ben Graham Would Like Here [view article]
- Mortgage REIT Magic [view article]
- Seven REIT's Yielding Over 10% [view article]
- 25 Stocks Benjamin Graham Would Like [view article]
- 35 Stocks That Ben Graham Would Like Here [view article]
- Gramercy Capital to Acquire Fellow REIT American Financial for 31% Premium [view article]
- Housing Bubble and Real Estate Market Tracker [view article]
- Jim Cramer's Stop Trading! Stock Picks and Comments, March 14 [view article]
loading ...Recent GKK Articles
- Lehman's $30B CRE Portfolio To Hit The Market [Housing Tracker]
- Stock Performance Since Earnings
- CACC: Recent Events Add to the Short Thesis
- Mortgage REIT Magic
- 12 Stocks Ben Graham Would Like Here
- Seven REIT's Yielding Over 10%
- 25 Stocks Benjamin Graham Would Like
- 35 Stocks That Ben Graham Would Like Here
- Housing Market Tracker - U.S. Commercial Real Estate Consolidating
- Gramercy Capital to Acquire Fellow REIT American Financial for 31% Premium
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CACC: Recent Events Add to the Short Thesis [view article]
bro_t_pro,I believe to you to revisit your understanding of CACC. The advance to the dealer is non-recourse. See their 10k: "offer dealers a non-recourse cash payment (referred to as an “advance”) against anticipated future collections on Consumer Loans serviced for that dealer." The dealer is "in the money" at origination and historically has received little on the back end (Collection rate - advance rate - 20% fee). Dealers prefer the "purchase product" because they get a bigger advance and are more "in the money" at the sale of the car. The purchase product has grown from 5% to around 35% in the past year. Reply
CACC: Recent Events Add to the Short Thesis [view article]
Jackson,You have presented an interesting perspective on viewing the potential funding hurdles that a company such as CACC may indeed face. However, I feel that you may not understand the operational side of CACC's business as well as you understand the financial perspective. CACC does not merely "purchase" dealer contracts at a slight discount. The majority of CACC dealer contracts purchased, are in fact purchased "with recourse". In essence, the contracts are not really purchased, they are serviced or collected by CACC's collection department, and the dealer is paid an "advance" which represents a discount of between approximately 15-50%. The dealer advance is repaid to CACC as the payments for the auto loan are made. The advance becomes a "purchase" when enough payments are made on the loan (based on an 80/20 split) to pay back the dealer advance. In addition, the dealer receives an additional incentive after this "breakeven point" because he/she stands to receive an additional 20% if the entire contract is paid in full. This is why CACC uses SOP 03-3.
I am a firm believer that this is one of the nuances that sets CACC apart from other subprime lenders in the automobile finance industry. I believe that Wachovia understands this is as well. Further, I don't think comparing a commercial mortgage lender like Gramercy Capital makes any sense at all here. Obviously, given the turmoil in the mortgage finance sector over the last 14 months, any mortgage lender is going to be put under the microscope by his banker. If anything, with GMAC and Ford Motor Credit doing away with lease financing, more consumers will be forced to purchase used cars, and that is right up CACC's alley. I have been a recent (as well as small < 1000 shares) buyer, due to my belief that recessionary times are bullish time for CACC and their collection rates are consistently 20-30% above average dealer advance ratios. I think you should cover your position if you have one. Reply
12 Stocks Ben Graham Would Like Here [view article]
I believe the long record of dividends is about to be terminated and Augusy 08 will see no dividendOn Jul 22 12:29 AM DaveinHacken sack wrote:
> Barrett is a solid company that I bought too early. If you want to
> read why, click on my website and then search for "anatomy of a mistake". Reply
CACC: Recent Events Add to the Short Thesis [view article]
I agree that short selling can serve as the voice of reason and that even individuals with greater experience will exhibit "variability"... in their "conviction"... as measured by the size of the position they take relative to the value of the portfolios they manage. The problem with the existing system is that it does not differentiate between an individual hyping a position for a friend who stands to benefit and a genuine academic evaluation of an existing company's situation. Presently, an individual may write an article, buy or sell short a single share of stock, and then provide the existing disclosure. I believe that the fractional portfolio disclosure would help readers distinguish, but as you have noted there are many strategies and it would remain easy for an individual managing multiple types of funds to continue to distort such an extension to the disclosure policy. I would be impressed if such a system could be put in place with rapidity and precision. I also understand it could put the more honest authors at a disadvantage to some of their more seasoned and less ethical peers who would not want to be held to such standards. ReplyAmerica
CACC: Recent Events Add to the Short Thesis [view article]
Lance,Your suggestion is very interesting. I think that requiring (in good faith) an author to disclose his/her position is fundamental to helping readers balance an author's natural subjectivity with the inevitable other side of the argument. Sites like Seeking Alpha are fantastic because they allow investors to share their thoughts and work with the investment community. Further, these sites provide a forum for investors to present well articulated, factually-driven, negative views on stocks and sectors. Cautious investment opinions can be very helpful in highlighting investment dangers (despite the stigma associated with short selling). Feedback and comments to the author make the process even more helpful for the entire community.
However, asking authors to disclose the size of their positions takes the "intent" behind asking an author to disclose their position, to a whole new level. I also would argue that a position size is not always consistent with conviction levels, which can lead to an outcome that could actually be misleading. For example, some positions can be sized based upon daily volumes, upon sector allocations, upon strategy (quant funds may have 1000's of positions, whereas concentrated value deep value funds, may only have 10 positions), etc. Your suggestion is very interesting and I’m sure would provoke a wide variety of opinions.
Reply
CACC: Recent Events Add to the Short Thesis [view article]
I know the authors of these articles read the comments that get posted. I would like to offer a suggestion not only to Jackson but all authors who provide disclosures along with their analysis. It would be very beneficial if the author would also specify the fraction of their porfolio for which the position is held or a range. Thus, one could specify 5.6% or between 7.5-10.0%. This would avoid the author from having to disclose the worth of their portfolio, but also give the reader some guidance regarding their degree of conviction. Without this additional bit of insight, many readers could commit an excessive proportion of their funds to a position. Clearly, this could assist both well intentioned authors and their readership. ReplyMortgage REIT Magic [view article]
oh yea-all these guys are good decision makers.great management. ReplyC
Mortgage REIT Magic [view article]
I didn't mean to imply that debt buyback was a scam. In fact, it is a very attractive investment for mortgage REITs who believe their CDOs are trading below the present value of their expected future cash flows. Shouldn't the manager of the CDO be in the best position to judge the CDO's future performance? Many of these asset-backed bonds are "money-good" but currently are priced to reflect a severe liquidity discount. It just makes sense to buy back the debt, delever your balance sheet, and offset your taxable losses with taxable gains. ReplyMortgage REIT Magic [view article]
clarification is good. all the games in vegas & other casinos are very clear. most still lose. wall st.is now vegas,slower & nobody brings a drink. ReplyMortgage REIT Magic [view article]
Thank you, Patrick! Evaluating mortgage REITs has always been somewhat of a mystery to me, and your fine article and reply certainly help clarify some of this enigma. ReplyMortgage REIT Magic [view article]
if it looks like a scam, and seems like a scam, and finds support in paper "valuations" then it is probably too good to be true and isn't. ReplyC
Mortgage REIT Magic [view article]
REITs are required to distribute as dividends at least 90% of their ordinary taxable income. This is the metric that drives the dividend for most mortgage REITs. Because Gramercy Capital's sponsor is a large equity REIT, however, Gramercy follows SL Green's practice of disclosing funds from operations instead of taxable income. Generally speaking, FFO and taxable income should be roughly similar; however, this is not always the case for mortgage REITs. Gramercy's practices are not the norm for the mortgage REIT sector and I believe they should disclose taxable income as well as FFO. Given the merger with AFR, however, it may well be a moot point now. ReplyMortgage REIT Magic [view article]
you heard of shell games.now its just paper games. its all becoming more & more of a scam.the few making money on these games must be laughing while the masses have no idea of whats going on as the insiders build their fortunes for their kids,grandkids etc. ReplyMortgage REIT Magic [view article]
I'm confused by the statement "allowed the Company to maintain funds from operations just above its dividend payout". Aren't REIT dividends based directly on their current FFO? I thought REITs had to, by law, distribute between 90% and 100% of their FFO as dividend, with any amount exceeding that having to be listed as "return of capital". If that's true, then--by definition--funds from operations would always be just above the dividend payout.Reply
sack
12 Stocks Ben Graham Would Like Here [view article]
Barrett is a solid company that I bought too early. If you want to read why, click on my website and then search for "anatomy of a mistake". Reply