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charliezap

charliezap
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  • Is Realty Income Cheap Enough Yet? [View article]
    Don't mean to butt in but,

    If you have $10,000 to invest, and you get O for $50, you can buy 200 shares. Annualized dividend is $2.28, so you can expect $456 per year.

    With $10,000 to invest, and O at $40, you could buy 250 shares. Annualized dividend is $2.28, so you can expect $570 per year.

    As I see it, price does make a difference.

    The chart looks uncertain. O hit a 6-month low on Wednesday and yesterday's bounce looks positive. The indicators (MACD and RSI) may be turning positive. I'd give a 60% probability that we have hit bottom, but we may be range bound for a while.
    Jul 3, 2015. 02:53 PM | 1 Like Like |Link to Comment
  • What's Next For BP Following The $18.7 Billion Settlement? [View article]
    Please excuse me for repeating the same comment that I made to another article.
    **********************...
    I've said before -- and I've been right so far. So I'll say it again. A merger with XOM won't happen. So any "rumors" to that effect will be just trader talk. One reason, the uncertainty of the spill liability may have gone away, but the other reasons remain.

    1. It would create a very large, unmanageable morass

    2. It would create an immense culture clash -- the Exxon guys would essentially take over just as when Exxon took over Mobil -- and a lot of good talent at BP would quit -- many BP projects would languish because of NIH (not invented here)

    3. XOM would not do it anyway -- they are ultra cautious and they are still feeling stung by the XTO takeover

    4. There would be opposition from both the UK and US governments; dealing with the opposition would divert a lot of management attention away from more productive business efforts.

    Pretty much the same reasoning applies to possible takeovers by CVX or RDS.
    Jul 3, 2015. 01:08 PM | 1 Like Like |Link to Comment
  • Spill settlement lifts major overhang for BP, but next move far from certain [View news story]
    Excuse a little untidiness and remove the last 2 lines.
    Jul 3, 2015. 01:04 PM | Likes Like |Link to Comment
  • Spill settlement lifts major overhang for BP, but next move far from certain [View news story]
    I've said before -- and I've been right so far. So I'll say it again. A merger with XOM won't happen. So any "rumors" to that effect will be just trader talk. One reason, the uncertainty of the spill liability may have gone away, but the other reasons remain.

    1. It would create a very large, unmanageable morass

    2. It would create an immense culture clash -- the Exxon guys would essentially take over just as when Exxon took over Mobil -- and a lot of good talent at BP would quit -- many BP projects would languish because of NIH (not invented here)

    3. XOM would not do it anyway -- they are ultra cautious and they are still feeling stung by the XTO takeover

    4. There would be opposition from both the UK and US governments; dealing with the opposition would divert a lot of management attention away from more productive business efforts.

    Pretty much the same reasoning applies to possible takeovers by CVX or RDS.


    Prett

    1. The combined company would be so large
    Jul 3, 2015. 12:06 PM | 1 Like Like |Link to Comment
  • Is Realty Income Cheap Enough Yet? [View article]
    According to Yahoo, the median target price for O is 49, with a low estimate of 42 and a high of 57. The low man on the totem pole happens to be Citigroup, who rate O as a Sell. Citi has had a Sell on O for some time -- a year ago, their TP was 33. Here is how they value O:

    ""Valuation: We value Realty Income using a combination of NAV, AFFO, and FFO multiple valuation. For O, our valuation methodologies take into consideration the company's low leverage and available capital with which to acquire, well-covered dividend, stable core operations, and on the negative side, premium valuation and the risk of rising rates. Target price of $42, which reflects a ~15x 2015 AFFO multiple.""
    Jul 2, 2015. 11:42 PM | Likes Like |Link to Comment
  • Is Realty Income Cheap Enough Yet? [View article]
    """On the other hand, as interest rates rise, and inflation rises, the value of the real estate holdings become more valuable, and over the long term rents will increase."""

    By just how much will the real estate holdings become more valuable if they are "encumbered" with triple net leases that go for 10 years or longer. The problem with triple net REITs, such as O, is that future cash flows are highly predictable, because of the long term leases, which usually have limited rent escalators -- 1-2% -- though some may be tied to CPI. This makes them more "bond-like", and vulnerable to increases in the 10-year Tbond rate.

    But, long-term, they ought to do well.
    Jul 2, 2015. 05:04 PM | Likes Like |Link to Comment
  • Adding CVX To My Portfolio [View article]
    CVX could still increase the November dividend payment, which would maintain the calendar year dividend increase record.
    Jul 1, 2015. 10:52 AM | 2 Likes Like |Link to Comment
  • Sasol President/CEO Constable to step down next year [View news story]
    Many foreign companies including Sasol pay dividends semi-annually, first an interim dividend, and then a final after the close of the fiscal year. On a trailing 12 months basis, the gross dividend on Sasol's ADRs amounts to $1.835 (0.572 + 1.263, data from Yahoo historic prices page). But Yahoo's summary page is clearly in error, showing only something approximating the final div (perhaps Yahoo deducted an ADR fee in the summary?).

    http://yhoo.it/1f1156Y

    Based on yesterday's closing price, the current yield is 1.835/37.06 = 5.0%. This is before the 15% South African withholding tax, which can be recovered via a tax credit in a taxable account, but not in an IRA.

    Incidently, in the face of heavy upcoming capital expenditures and lower oil prices, Sasol announced a new dividend policy back in February. This make it highly likely that Sasol's dividend for the next 12 months will be lower than the last. Here is a link:

    http://tinyurl.com/pn6...
    Jul 1, 2015. 10:45 AM | 1 Like Like |Link to Comment
  • Senior Housing Properties Trust: A Big Opportunity In The Assisted Living Industry With An 8% Yield [View article]
    FWIW = For What Its Worth.

    Like the Geico ad says: "Everybody knows that!". At least I thought so. Anyway, a lot of people who comment here tend to be skeptical of analysts forecasts, and in the case of the growth forecasts above, the sampled analyst pool is rather limited -- while many analysts indulge in forecasts of FFO, far fewer venture out with a growth forecast.
    Jun 29, 2015. 06:09 PM | Likes Like |Link to Comment
  • Adding CVX To My Portfolio [View article]
    Excuse me for interrupting your dreams. But why then did you put this article out there? Purely for your own self-edification? You told us you bought the stock. OK, but of what interest is that for the rest of us? Then you proceeded with some very flimsy reasoning for buying the stock. Now you're all worked up because someone questions your reasoning. So why bother to publish the article in the first place?
    Jun 29, 2015. 12:56 PM | 2 Likes Like |Link to Comment
  • Senior Housing Properties Trust: A Big Opportunity In The Assisted Living Industry With An 8% Yield [View article]
    In addition to the base fee, as Omer has described it above, there is an incentive fee that is based on the total return on the shareholding. This is from the management agreement:
    ----------------------...
    ""The new incentive fee will be calculated based on total return per share (dividends and share price changes) realized by SNH’s shareholders in comparison to the total return of the SNL REIT Healthcare Index, or the Benchmark. The incentive fee formula will be based on the amount of outperformance, if any, realized by SNH’s shareholders during the measurement periods compared to the Benchmark, multiplied by a 12% participation rate. For example, if SNH’s shareholders’ total return is 10% during the measurement period and the Benchmark’s total return is 5% during that same period, the incentive fee will be 12% of the 5% of total outperformance realized by SNH’s shareholders. ""
    ----------------------...
    I believe that the new fee structure is much better at aligning RMR's incentives with shareholder interests.
    http://tinyurl.com/pzd...
    Jun 29, 2015. 12:33 AM | Likes Like |Link to Comment
  • Making Magic: Monthly REIT Dividends [View article]
    Brad usually writes on equity REITs that own building properties that pay rents. He usually avoids mortgage REITs, such as AGNC, that own paper, i.e., mortgages and mortgage securities. mREITs depend for their profitability on interest rate spreads, and use a lot of hedges.

    Its hard enough to forecast interest rates. But spreads? And hedges?
    Jun 28, 2015. 08:40 PM | 1 Like Like |Link to Comment
  • The Natural Gas Industry Will Meet An Untimely Collapse [View article]
    Oops! Something slipped here. The comment should start this way: ""This article is completely ridiculous. It seems to be based solely on the author's generally unscientific opinion. Here are 2 scientific facts:

    1. The sun does not always shine

    2. Battery storage needs a huge breakthough . . ""
    Jun 28, 2015. 05:03 PM | 2 Likes Like |Link to Comment
  • Adding CVX To My Portfolio [View article]
    """CVX is trading at a P/E Ratio of 10.86. Capital IQ ranks CVX as 4-stars with a 12-month target price of $125. Morningstar ranks CVX as 4-stars with a fair-value price of $115.. . . . I believe CVX stock to be undervalued and a great buy."""

    There is very little in the article to support this opinion, and I believe the author is being disingenuous when he cites a PE ratio of 10.86. According to Thomson-Reuters, the consensus estimate for 2015 earnings is $3.91, not enough to cover the current dividend, and putting the PE ratio over 25 times. The main support in the article is based on historic 3- and 5-year dividend growth rates, but this backward looking approach fails in the light of reality: the reality is that WTI crude is down by 39% vs 1 year ago. Further, there is little or nothing in the article by way of discussion of supply and demand in the future, the main determinant of future earnings and dividends, and of the value of CVX's underlying oil and gas reserves.
    Jun 28, 2015. 04:55 PM | 10 Likes Like |Link to Comment
  • The Natural Gas Industry Will Meet An Untimely Collapse [View article]
    This article is completely ridiculous. It seems to be based solely on the author's2 scientific facts:

    1. The sun does not always shine

    2. Battery storage needs a huge breakthough to make possible any kind of steady supply from solar. With the current state of the art, battery storage is neither economically or physically feasible to the extent necessary for solar to displace natural gas in power production for at least 2 decades ahead.

    The niche provided by Random Logic provides all the reasons to dismiss this article completely. While I understand that SA believes that differing viewpoints can contribute to a discussion, I am very surprised that this article was approved for publication. The article is nothing but the uninformed opinion of an undergraduate student
    Jun 28, 2015. 04:12 PM | 10 Likes Like |Link to Comment
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