Seeking Alpha

kaptain_lou

kaptain_lou
Send Message
View as an RSS Feed
View kaptain_lou's Comments BY TICKER:
Latest  |  Highest rated
  • Investment Grade Preferred Stocks At 6.15%, Buyers Become More Risk Tolerant [View article]
    Doug, thanks for yet another quality article on preferreds. While the yields on investment grade preferreds are the lowest in years, it sure beats other fixed income investments at the time and can be tax deferred if held in a retirement account.

    Have you ever considered recommending preferred stocks that are not rated? There are a number of companies with a solid balance sheet that only have one or two small issuances of preferreds, but don't want to pay the large fees associated with obtaininig a rating. I've held preferred stock in Urstadt Biddle for years and they are an extremely solid company, but just don't have any ratings for their preferreds.
    Jun 2 07:46 PM | 1 Like Like |Link to Comment
  • Realty Income Is Simply A Great REIT And Nowhere Close To A Bubble [View article]
    Sartre, I expect a 20-30% correction in REIT prices over the next few months. With that being said, I would personally not purchase any shares above $35 per share. There is also a decent chance of a stock market correction over the summer, and this could also drive the share price lower.

    I'm bearish now on REITs, not because real estate is a bad investment (it is actually a very good investment when purchased at the right price), but because the valuation of many companies is extremely high and will be corrected. I'm a big fan of Post Properties (PPS), but wouldn't touch shares at the current level - and this is only one more example of a great company that is currently overvalued.
    Jun 2 10:49 AM | 1 Like Like |Link to Comment
  • Just How Low Can 'O' Go? [View article]
    Good article on O. It appears now that many REITs are overvalued, based on several metrics, and I expect there will be a 20-30% correction in the sector over the next few months. For investors looking for income, there may be more safety in certain preferred shares that are trading close to par value.
    Jun 2 10:38 AM | Likes Like |Link to Comment
  • Realty Income Is Simply A Great REIT And Nowhere Close To A Bubble [View article]
    It is still a horrible time to pick up shares of "Zero" considering the price to book value, price to sales ratio and trading over 20x FFO. It just defies all logic. You are down over $4 per share on your purchase.

    This week, I have picked up shares of STAG preferred B, RPAI preferred A, and senior bonds of Ruby Tuesday. All of those were trading reasonable, and lost little to no value.
    Jun 2 12:19 AM | Likes Like |Link to Comment
  • Realty Income Is Simply A Great REIT And Nowhere Close To A Bubble [View article]
    smurf, the REIT stocks are getting crushed at the present time and many are still overvalued. There could not be a worse time to pick up shares of many REITs.
    Jun 2 12:09 AM | Likes Like |Link to Comment
  • Realty Income Is Simply A Great REIT And Nowhere Close To A Bubble [View article]
    Yes, NNN's preferred would also be vulnerable when interest rates return to normal. However, O and many other REITs, could easily see a 30% correction in the next few months. However, I doubt if NNN's new $25 preferred will drop to $17.50 (a 30% correction).

    Trading at 18 times sales is one of the easiest ways to see that the company is overvalued. NNN's common is trading at about 14 times sales, which is still too high, but not quite as high.
    May 24 01:30 PM | Likes Like |Link to Comment
  • Realty Income Is Simply A Great REIT And Nowhere Close To A Bubble [View article]
    Purchasing O at the current price level of $50 may turn out to be a poor investment for the long term. Per Yahoo, O is currently trading at 18 times sales, which is an incredibly high number. It's the equivalent of paying $180,000 for a rental property that brings in only $10,000 in rent per year. While O's properties are normally triple net leased, paying 18 times sales for real estate is clearly overpaying. Some of the other REITs have also dropped 10% recently, so the market appears to believe that many are overvalued. A few years from now when interest rates return to normal, the price of O could easily be in the upper 30's to very low 40's.

    For investors looking for income, I'm not sure why investors would not just pick up the new NNN preferred E stock with a coupon rate of 5.70%. They are not trading yet, but should be available soon.

    Good luck to all investors.
    May 24 10:28 AM | 2 Likes Like |Link to Comment
  • Optimizing Triple Net Lease REIT Investment: Time To Sell Realty Income [View article]
    After reading some of the comments on this article, I wanted to comment to those considering a short position in O, as I may soon do the same.

    In the short-term, the market is not always right. However, in the long-term, the market is usually right. When taking a short position in any company, it is normally prudent to cover with some call options. While they may be an expensive "insurance policy" the December 2013 call options at $55 would help cover your short position and reduce your risk. Just be sure to buy the purchase the right amount of call options to cover the shares you have shorted. While they may expire worthless, should the stock tank, it is an option worth consdering. And if the stock tanks, you will lose the call options but should be able to cover your short position.

    Best wishes to all investors.
    May 14 10:54 PM | Likes Like |Link to Comment
  • Optimizing Triple Net Lease REIT Investment: Time To Sell Realty Income [View article]
    Dane, thanks for another quality article. As a long term investor in real estate, picking up O with a cap rate of about 5% is a poor investment. The Fed is artificially lowering interest rates, thus inflating values of REITs. Investors are hungry for yield, but they will pay the price for this down the road when they finally realize that you can't buy real estate with a cap rate of 5%. Good company, just very overpriced at the current level. NNN is also a good company, but shares are too expensive.

    kaptain lou
    May 14 10:11 PM | Likes Like |Link to Comment
  • 13 New Preferred Stocks Provide 6.2% With Increased Principal Protection [View article]
    Doug, thanks for another quality article on the right way to buy preferreds. I've read your book and may subscribe to your service soon, as it would quickly pay for itself because I am a big investor in preferred shares.

    Many preferred shares issued in the past year now trade over $26 per share and a key way to make money on preferreds is to purchase at the right price. I've noticed that TD Ameritrade is probably one of the best firms to buy shares OTC.

    I appreciate your articles and you sharing your information with other investors.
    Mar 20 09:50 PM | Likes Like |Link to Comment
  • Off Line For Now [View instapost]
    Mike, thanks for your unbiased articles over the past two years. They were very much appreciated. Fixed income and bond investors, such as myself, will miss your writing skills and insight into these areas that are often overlooked.

    I wish you continued success in your career.

    KL
    Oct 7 08:09 PM | Likes Like |Link to Comment
  • CommonWealth REIT: Beware The Dividend Trap [View article]
    I started a position earlier this week when the company got under 50% of book value. While the dividend will likely be reduced sometime in the near future, I think that cut is already priced in. I don't like their management agreement with RMR, but can't find another REIT stock that has investment grade debt and is trading for such a discount to book value.
    Sep 28 11:02 PM | Likes Like |Link to Comment
  • CommonWealth REIT's Exceptional Portfolio Is Spoiled By The Public Perception Of RMR [View article]
    Thanks for the article and update on the company. While I don't like the way they farm out management to RMR, the company is now trading at about 50% of book value and some of the properties may be worth much more than book value. It's worth taking a position in the company at these levels, as a significant dividend cut looks already priced into the shares.
    Sep 18 09:28 PM | Likes Like |Link to Comment
  • REIT Dividend Yields: New Low Rates Are Normal, But Not A 'New Normal' [View article]
    Yes, I had to turn over a number of rocks, and some bad apples, to find FREVS. Then had to do a complete review of the balance sheet and income statement - and then had to sit back and wait until one day on my watch list I saw they dipped down to $17 per share and thought it was time to finally buy. When they were at $17, the stock was trading at only about 10x FFO for 2011 and looked cheap.

    This week I started a very small position in MPW. I still need to do some more research, but they look like one of the mid-cap REITs that are not followed by many investors.
    Sep 14 09:24 PM | Likes Like |Link to Comment
  • Public Storage - Like The Limbo, How Low Can You Go [View article]
    The old Shurgard debt has been around for a long time, but it was always a very small part of their capital structure. Overall, the company basically has no debt. Bond funds yield next to nothing, so the preferred shares are still a possible alternative to certain investors - especially for retirees and non-profits. Their sister company, PSB, also has very low debt and I am sad to see my PSB-P 6.7% shares called.

    Just my thoughts here, but a retired investor that still wants income, should consider shares. The Fed has claimed that they will not raise rates until 2014, but it could be a long and slow recovery and investors can always sell shares should there be any hint of rising income rates. Personal opinion only, but rates may not even rise until 2015 or 2016.

    MCD is issuing 30 year bonds at about 4%, and I like the company and their track record, but the "Happy Meal" for my non-profit is always PSA's preferreds.

    Thanks again for another quality article.

    KL
    Sep 12 10:42 PM | Likes Like |Link to Comment
COMMENTS STATS
271 Comments
160 Likes