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charliezap

charliezap
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  • 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 | 1 Like 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 | 9 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
  • Senior Housing Properties Trust: A Big Opportunity In The Assisted Living Industry With An 8% Yield [View article]
    Why the discussion of cutting the dividend? In the 15 years since SNH went public, SNH has never cut the dividend, even though the great recession. FFO is adequate to cove the current dividend. Why would they do so now?
    Jun 28, 2015. 02:20 PM | Likes Like |Link to Comment
  • Senior Housing Properties Trust: A Big Opportunity In The Assisted Living Industry With An 8% Yield [View article]
    Based on calendar year 2014, Vertex paid 29% of MOB rents. MOBs provided 38% of SNH's NOI (almost all of the remaining NOI was from senior living facilities). Vertex dependency = .29 x .38 = 11%. (Source: 2014 10K report.) Vertex is a pharmaceutical company with a $30 billion market cap.
    Jun 28, 2015. 11:47 AM | 3 Likes Like |Link to Comment
  • Senior Housing Properties Trust: A Big Opportunity In The Assisted Living Industry With An 8% Yield [View article]
    """With a payout ratio of 208% and substantial debt combined with the prospect of rising interest rates, do you think that the current dividend is really sustainable?"""

    ayalara,

    1) Payout ratios for equity REITs are based on DPS/FFO per share. The current annual dividend rate is $1.56. 2015 estimated FFO is $1.81, so the payout ratio = 1.56/1.81 = 86%. Large cap competitors, such as VTR and HCN, have payouts in the 68-72% range, but 86% is sustainable. [FFO = Funds from Operations]

    2. Substantial debt? Per the latest earnings report, the ratio of SNH's LT Debt to EBITDA, a common measure of the ability to fund debt obligations from cash flow, is a modest 5 to 1. More recently, SNH took down $500 million from its credit line to fund the acquisition of 23 medical office buildings. By my calculations, this brings debt up to 5.8 X EBITDA, still in line with peers.

    3. Rising interest rates? Other than the credit line borrowings, about 15% of the total, all of SNH's debt is fixed rate, so rising interest rates will not have much impact in the intermediate term future.

    4. Dividend sustainable? SNH has not cut its dividend since starting with $0.30 quarterly in 2000. The current rate is $0.39.
    Jun 27, 2015. 04:58 PM | 3 Likes Like |Link to Comment
  • Does Randgold Belong In Your Portfolio? [View article]
    Illuminating. Randgold does seem to set itself apart from other miners suffering from high debt and high costs.
    Jun 27, 2015. 07:57 AM | Likes Like |Link to Comment
  • Exxon Mobil Stays Focused On Fundamentals [View article]
    Too bad XOM closed today at $83.86. You are down by an amount that is equal to almost 6 quarters of dividends.
    Jun 27, 2015. 12:05 AM | 1 Like Like |Link to Comment
  • Citigroup Breaks Out To New Highs [View article]
    Jason, let me repeat the question: Do you really believe that Citi could have avoided the need for a government bailout if they could have taken over the practically belly up Wachovia? (And had not been outbid, $7 to $2, by Wells Fargo?)
    Jun 27, 2015. 12:00 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]
    SNH is the cheapest of the healthcare REITs by several metrics -- current yield = 8.4%, 2015 FFO multiple < 10, and discount to NAV = 28% (by Citigroup's estimate).

    SNH carries the "taint" of being externally managed by RMR, and this is usually given as the reason that it sells at a discount to peers. But the management agreement with RMR was changed in 2013 to bring management incentives more in line with shareholder interests.

    I am long SNH for the 8.4% yield, and I see no reason why SNH should not enjoy FFO growth at least equal to the average of its peers.

    Analysts' estimates of future growth rates are notoriously unreliable, in part because the "consensus" is based on estimates from just a few analysts, but, FWIW, here are the forecast 5-year FFO growth rates for SNH and peers (source: Yahoo):

    SNH 4.75%
    VTR 4.3
    HCP 3.3
    HCN 5.7
    HTA 2.7
    Jun 26, 2015. 11:49 PM | 4 Likes Like |Link to Comment
  • Is Exxon Mobil The Perfect Dividend Stock? Think Again [View article]
    When GM had over 54% of the US market back when, there was no one, repeat no one, who was saying it had a narrow, shallow moat!

    Morningstar's moat judgments are pretty subjective anyway.
    Jun 26, 2015. 09:07 AM | Likes Like |Link to Comment
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