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charliezap

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  • BP Brings Fracking To The Middle East To Support High Dividend Yield [View article]
    Callum, this type of gas is known as "stranded gas". There simply is not a big enough local market for this quantity of gas, and it will have to be exported by building LNG facilities. Oman, a country with a population of only 3.6 million, already exports half of its existing natural gas production. LNG exports from Oman will be in competition with other mammoth projects in Qatar, Indonesia, and northwest Australia.

    The upfront investment of $16 billion will definitely not support BP's high yield. Not for many years, anyway.

    http://1.usa.gov/17DhnP8
    Feb 27, 2015. 09:04 AM | Likes Like |Link to Comment
  • BP Brings Fracking To The Middle East To Support High Dividend Yield [View article]
    Just what the world needs -- another giant gas field in a desert country!
    Feb 27, 2015. 07:44 AM | Likes Like |Link to Comment
  • Buy Exxon Here And Forget About It [View article]
    oilrich

    The more you respond, the more you show your financial ignorance. You don't seem to know the difference between debt and equity. Or between stocks and bonds.

    S&P gives Exxon a AAA corporate credit rating. So Exxon's bonds are rated AAA.

    S&P gives Exxon's stock a 3-star (***) rating. Ratings are as follows:

    ***** = Strong Buy
    **** = Buy
    *** = Hold
    ** = Sell
    * = Strong Sell

    So Exxon's stock rates a Hold.

    When financial writers loosely use the term AAA stock, they are not judging the merits of investing by buying stock. They are actually saying that this is a company with a AAA bond rating. The AAA rating has nothing to do with the merits of buying the stock!
    Feb 27, 2015. 12:32 AM | 1 Like Like |Link to Comment
  • Royal Dutch Shell: Undervalued Energy Giant With A Secure 5% Dividend Yield [View article]
    Shell has not had a dividend cut since switching to quarterly dividends in August 2005.
    Feb 26, 2015. 10:58 PM | 1 Like Like |Link to Comment
  • Royal Dutch Shell: Undervalued Energy Giant With A Secure 5% Dividend Yield [View article]
    Frankly, I don't see how anyone can write an article recommending purchase of RDSA without at least discussing the fact that the consensus of analysts (Reuters) is that earnings in 2015 will be $3.69, down from $7.14 in 2014, a drop of 48%.
    Feb 26, 2015. 06:36 PM | 2 Likes Like |Link to Comment
  • Last Chance To Board The American Realty Capital Train? [View article]
    In your section "Recent Value Indicators", I thought I would see some value indicators, such as Net Asset Value, or perhaps value derived by applying a multiple to an FFO estimate, or an estimate of the reinstated dividend rate compared with competitors. Instead, we got inconclusive items like institutional buys/sells, insider trades, and analyst opinions. A bit like when a witchdoctor "throws the bones" and comes up with a prediction about the future!
    Feb 26, 2015. 06:18 PM | 1 Like Like |Link to Comment
  • Exxon says spending to fall 11% to $34B [View news story]
    Just surprised they didn't cut by more.
    Feb 26, 2015. 06:00 PM | Likes Like |Link to Comment
  • Where's The Trust In Hospitality Property Trust? [View article]
    """ Portney overpaid and now he has saddled TA with off-balance sheet debt..."""

    Sorry, Brad, but I just don't get what you are getting at. What do you have to substantiate that Portnoy overpaid? I thought the article was about HPT, not TA, but if its the security of the lease payments, then there is this excerpt from HPT's 2013 annual report: ""We define coverage for our travel center leases as property level revenues minus all property level expenses divided by the minimum rent payments due to us. During the twelve months ended September 30, 2013, the operating results from our 185 properties in our two travel center leases generated coverage of 1.58x.""

    I also don't get this comment: ""If TA wants to be profitable it should package up the real estate portfolio (including the HPT sites) and recast the leases . . "". HPT owns the sites, and they are triple net leased to TA, so a recasting of the leases would have to be by mutual agreement. They (HPT and TA) already did this once, after the 2009 recession, in order to make the payments less burdensome.

    Finally, if TA is so insecure financially, how come this hedge fund guy thinks its worth $27 per share, twice its current price?
    Feb 26, 2015. 05:55 PM | Likes Like |Link to Comment
  • Where's The Trust In Hospitality Property Trust? [View article]
    Brad, 75% of TA's truck stops are leased to HPT until 2022-24. Then there are 2 15-year renewal options.
    Feb 26, 2015. 05:35 PM | Likes Like |Link to Comment
  • Where's The Trust In Hospitality Property Trust? [View article]
    Brad,

    Clearly you have a very negative attitude toward HPT. However, I would like to point out a few positives:

    1. Amendment of management agreement with RMR in 2013 to better align management interests with shareholder interests.
    http://bit.ly/1wswx5k

    2. The TA lease is long term -- it expires in 2022. The Petro lease expires in 2024. The leases include provisions for additional percentages based on increases in non-fuel sales and on fuel sales.

    3. TA says its truck stops are larger than those of competitors. The land was acquired some time ago, when land was cheaper and more available. TA says the size and strategic location on heavily traveled interstates gives it an advantage versus competition.

    4. Dividend Yield, a bird in the hand is worth two in the bush. Yes, analysts have higher estimates of growth for the others, but that is not as assured as the dividend.

    Yield%:
    HPT 6.2
    HT 4.2
    CLDT 3.9
    LHO 3.8
    PEB 1.9

    Yes, HPT cut its dividend in 2009. But LHO also did, to a penny a share (quarterly). HA's current div rate is still only 40% of what it was in 2008. PEB and CLDT did not exist in 2009.

    I was long HPT until recently but I sold as part of my trimming my REIT holdings in view of interest rate concerns. With the recent selloff in HPT, its looking like a Buy again. Buying some now before earnings, and may buy more after.
    Feb 26, 2015. 03:42 PM | Likes Like |Link to Comment
  • Buy Exxon Here And Forget About It [View article]
    oilrich, let me repeat:

    XOM has a AAA corporate credit rating. It applies to Exxon's bonds and other debt. It does not apply to the stock.

    http://nws.mx/1wsjZLw

    As to XOM stock, S&P currently rates the stock at 3 stars of of 5 -- that is a Hold.
    Feb 26, 2015. 02:10 PM | 1 Like Like |Link to Comment
  • Buy Exxon Here And Forget About It [View article]
    oilrich, XOM has a AAA bond rating. That doesn't make it a AAA stock.
    Feb 26, 2015. 11:00 AM | 1 Like Like |Link to Comment
  • American Realty Capital Properties: A Rare Bit Of Good News [View article]
    """three Hedge Funds . . have invested huge money in the company in the last 90 days. Now, do you think they invested . . to make a buck a share?...I don't. It would not surprise me if their plan includes a sale of a vast majority of the assets . . """

    If they liquidate the assets, they probably won't make even a buck a share, and they could get a lot less. Some, including myself, have guessed that the NAV (i.e., the liquidation value) might be around 10.25 a share. Brad Thomas, on the other hand, has done a very detailed (and conservative) analysis, and he came up with $8.48 as the NAV. (See link below.)

    http://seekingalpha.co...

    Liquidation is the downside case, IMO. To get more, ARCP's management must restore the REIT to "normal". That is, they must publish the financial statements and restore the dividend. Then they must work to restore their credibility with shareholders.

    If the dividend were restored at an annual $0.65, the yield would be 6.8%. ARCP's chief competitors, O and NNN, yield 4.4% and 4.1% respectively. If ARCP's yield got just halfway back to the average of these 2 competitors, to 5.5%, that would imply a price of $11.75 for ARCP.
    Feb 25, 2015. 11:30 PM | 1 Like Like |Link to Comment
  • American Realty Capital Properties: A Rare Bit Of Good News [View article]
    ARCP has been a train wreck. I am long. I bought at $8. Its now at $9.58. I am staying long.

    There are some companies where the assets walk out the door every night, e.g., in computer software, investment banking, media, etc.

    At ARCP, the people are not the main assets. The buildings are. The buildings are there today, and they'll be there tomorrow. They will not walk out the door. In other words, for ARCP it does not matter very much if the people walk out the door (or get kicked out).
    Feb 25, 2015. 09:20 PM | 1 Like Like |Link to Comment
  • Should I Own REITs In A Retirement Account? [View article]
    """Reits should be used in a retirement account sparingly."""

    bill, you seem to be referring to mortgage REITs. Mortgage REITs are highly levered and they play interest rate spreads. Their incomes, and hence their dividends, are unpredictable. They often have high yields, but are high risk, so much so, that some failed during the 2009 debacle.

    Brick and mortar REITs, that is, equity REITs, derive their incomes from rents. Most are not overleveraged. REITs in sectors such as triple net, offices, and shopping malls have long term leases, making their incomes more predictable. Some, in sectors such as hotels, have more cyclical income streams. In 2009, the 90% payout rule was waived, and a few REITs eliminated dividends for a few quarters to conserve capital. Most did not. I am not aware of any equity REITs that went bust.

    I think there is a place for REITs, that is equity REITs, in IRA accounts, up to 25%, in normal times (whatever that is). My concern at the present time is that many REITs are overvalued, and yields are much below their historic average. 10 of the 15 largest cap REITs now sell at yields of 3% or less. This, in my view, is totally inadequate, and possibly indicative of a bubble.
    Feb 25, 2015. 11:08 AM | 1 Like Like |Link to Comment
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