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charliezap

charliezap
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  • You're Missing The REIT Point: Investor Sentiment Is On Our Side [View article]
    """higher rates create downward price pressure on the high-yielders is a basic principle of investment 101"""

    rich, you'll have to show me the text book that demonstrates this. What I do know is that, other things being equal (such as credit conditions) junk bonds of the same maturity are less sensitive to interest changes than high grade bonds or treasuries. The reason: junk bonds have a lower duration, and it is duration that determines interest rate sensitivity. In effect, because of the high coupon, you get more of your investment back sooner with a junk bond than with a treasury (remember we are assuming the same maturity).

    The link below explains it. Here is an excerpt:

    ""Duration is the tool that helps investors gauge these price fluctuations that are due to interest rate risk. Duration is expressed as a number of years from the purchase date. In simple terms, a bond's duration will determine how its price is affected by interest rate changes. In other words, if rates move up by one percentage point--for example, from 6% to 7%--the price of a bond with a duration of 5 years will move down by 5%, while a bond with a duration of 10 years will move down by about 10%.""

    http://tinyurl.com/p3z...
    Jul 30, 2015. 02:06 PM | 1 Like Like |Link to Comment
  • You're Missing The REIT Point: Investor Sentiment Is On Our Side [View article]
    PS: For now, I remain long several REITs, mostly higher yielding ones that I believe will be less susceptible to increases in the 10-year yield.
    Jul 30, 2015. 11:47 AM | 2 Likes Like |Link to Comment
  • You're Missing The REIT Point: Investor Sentiment Is On Our Side [View article]
    al, 3 years is a long period ahead to be making an interest rate forecast. In "normal" times, if we ever get back there, the 10-yr would be yielding 4-5%.
    Jul 30, 2015. 11:25 AM | Likes Like |Link to Comment
  • Wall Street Breakfast: Investors Await Fed Policy Announcement [View article]
    The discussion is becoming less than interesting. I can get this type of nonsense anytime on Fox Spews. I'm signing out.
    Jul 29, 2015. 07:43 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Investors Await Fed Policy Announcement [View article]
    Right on!
    Jul 29, 2015. 10:47 AM | Likes Like |Link to Comment
  • Wall Street Breakfast: Investors Await Fed Policy Announcement [View article]
    "The Fed knows the real jobs numbers."

    OK. So lets take the numbers from a private source, ADP.

    http://bit.ly/1IaBi71

    They conform pretty well with the BLS numbers, presented below.

    http://seekingalpha.co...
    Jul 29, 2015. 08:36 AM | 3 Likes Like |Link to Comment
  • What NAREIT Is Missing About Rising Rates [View article]
    A lot of confusion here.

    @Estella. You said: " . . the company's current return on equity has slightly decreased from the same quarter one year prior."

    Which company? NNN? You should be aware that ratios or metrics based on depreciated book values of assets can be quite misleading for property REITs. GAAP book values generally understate the underlying market values, which generally appreciate over time, even as the accountants write down the values through depreciation. ROE could have declined if NNN took on a bunch of new, undepreciated assets in the past year.

    @charles. Who mentioned mortgage REITs?
    Jul 29, 2015. 08:21 AM | 1 Like Like |Link to Comment
  • What NAREIT Is Missing About Rising Rates [View article]
    Reuben, an excellent analysis. I agree, this time it IS different.

    Triple net REIT's, having long term leases with mostly fixed escalators, are the most bond-like entities in the REIT sector. And this makes the triple net sector the most vulnerable to potential increases in 10-yr Tbond yields.

    The healthcare sector is probably the next most vulnerable, given that a high proportion of the NOI in this sector comes from triple net leases of medical facilities.
    Jul 29, 2015. 08:11 AM | 1 Like Like |Link to Comment
  • Once BP Crosses The 7% Yield Mark, I Am Going To Double Down Again [View article]
    The dividend is 10c per share on the shares traded in London. It is 60c per share on the ADS shares traded in New York.
    Jul 28, 2015. 05:20 PM | 6 Likes Like |Link to Comment
  • Once BP Crosses The 7% Yield Mark, I Am Going To Double Down Again [View article]
    For American shareholders, there is no tax withheld by the UK on ADS shares.
    Jul 28, 2015. 05:16 PM | 4 Likes Like |Link to Comment
  • Oil prices are headed higher, two top investors say [View news story]
    """These people are not counted as unemployed by the present government."""

    oilrich, they were not counted in the main official unemployment series, but they are counted in the U6 rate, which is also put out by the BLS. U6 unemployment now stands at 10.5%, down from over 17% in the depths of the Bush recession.

    http://bit.ly/1OiOrfc
    Jul 28, 2015. 07:48 AM | 1 Like Like |Link to Comment
  • This Industry's High Dividend Stocks Are Outperforming, Riding Major Demand And Are Yielding Up To 7% Plus [View article]
    Re DFT payout ratio: Actually, this is one of the things that the author got right.

    In the equity REIT business model (DFT is an equity REIT), dividends are paid, not from net income, but from cash flow, or more properly, FFO (funds from operations, as defined by NAREIT, the REIT trade association). FFO is GAAP net income with depreciation added back, plus adjustments for asset sales. Why add back depreciation? Well, unlike say, factory equipment, buildings don't wear out in the conventional sense, and they may even appreciate in value (though some allowance may have to be made for maintenance capex).

    A table in the article shows the per share dividends, and FFO payout ratio, which for DFT is 69.1%. Other tables show ttm FFO, and estimates for 2015 and 2016.
    Jul 26, 2015. 11:05 AM | Likes Like |Link to Comment
  • Oil prices are headed higher, two top investors say [View news story]
    Zedanski, I'm not sure what your point is. Let's skip the last 3 months and look at 15 months of data from Jan-14 through Mar-15:

    Data in '000s
    Jan-14 166
    Feb-14 188
    Mar-14 225
    Apr-14 330
    May-14 236
    Jun-14 286
    Jul-14 249
    Aug-14 213
    Sep-14 250
    Oct-14 221
    Nov-14 423
    Dec-14 329
    Jan-15 201
    Feb-15 266
    Mar-15 119
    Average 247

    Averaging 247,000 for the 15-month period, it looks like the economy is steaming ahead to me. Or do you have a better source of data?

    Here are the numbers for the latest 3 months (subject to revision, of course, but only by a few thousand, and will it be up or down?):

    Apr-15 187
    May-15 254
    Jun-15 223
    Average 221

    221,000 for the latest 3 months. It says to me that the US economy is still steaming along. And, based on the recent pickup in residential construction, I think we will see even stronger numbers in coming months. What's your reading?
    Jul 26, 2015. 10:07 AM | 1 Like Like |Link to Comment
  • This Industry's High Dividend Stocks Are Outperforming, Riding Major Demand And Are Yielding Up To 7% Plus [View article]
    Not sure exactly which one of the 5 stocks covered here is being recommended as a buy. The information seems to have been put together on the basis of "let's throw it all up on the wall and see what sticks".

    Questions for the author: for a property REIT, just what is the significance of price/sales and price/book ratios? Should I buy the stocks with the highest ratios or the lowest?
    Jul 25, 2015. 04:40 PM | 2 Likes Like |Link to Comment
  • Exxon's Huge Downstream Earnings Set To Continue [View article]
    Its supply and demand. And with Exxon's Torrance refinery knocked out, the supply is strained.

    http://1.usa.gov/1VBUK2d
    Jul 23, 2015. 04:52 PM | 1 Like Like |Link to Comment
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