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charliezap

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  • American Realty Capital Properties: "A Pretty Crushing Blow" [View article]
    Tack said: ""ARCP's price/book is way below one now.""

    With an equity REIT. book value can be meaningless. What counts is Net Asset Value. CEO David Kay says the NAV is $13.25, so ARCP closed at an almost unheard of 41% discount relative to NAV. Here is what he said on the conference call:

    ""In terms of transparency, our promise is to keep you up to date. The adjustments to date impact only -- we are only aware that they impact the disclosures in the numbers that we have laid out. Our annual dividend rate, not impacted by these adjustments, and we have laid out in our press release all the other items that are nonimpacted, including net operating income, net asset value, which as an aside, at $1.4 billion, at about 6.25% cap rate is about a $13.25 share price. That is not impacted by any of these adjustments.""
    Nov 3, 2014. 05:41 PM | 2 Likes Like |Link to Comment
  • Could American Realty Capital Properties' Accounting Scandal Benefit Realty Income? [View article]
    """Short term, would you rather buy ARCP at $8.87 or O at $46.03?"""

    I think the answer is obvious. ARCP is clearly oversold (RSI is below 20), and O is clearly overbought (RSI touched 80 on Thursday, prior to Friday's dip).

    On fundamental valuation, O is at 17.6 times 2014 FFO. ARCP will probably still do 2014 FFO of $1.20, putting the FFO multiple at just 7.4 times. I do not believe that the growth prospects for O versus ARCP justify the disparity. Analysts project 5.5% growth for O vs just 3% for ARCP (Yahoo), but ARCP has the potential for a significant upside correction once the "issues" are resolved.

    O currently yields just 4.8%, while ARCP yields 11.2%. ARCP's chairman has suggested the dividend will be maintained in spite of the recent issues, but even if it were cut in half, ARCP will still yield far more than O.

    So which is the best buy? I think the answer is obvious.

    Disclosure: Long ARCP at an average cost of $9.11 per share.
    Nov 3, 2014. 12:11 AM | Likes Like |Link to Comment
  • Update: Exxon Mobil Beats Estimates, Remains Attractive [View article]
    """WS 'analysts . . point incessantly to "lower production" leading to the demise of XOM. . . XOM has returned approximately 15% per year to its shareholders over a decade or more"""

    @combatcorps
    One thing is sure. IF XOM's production continues to decline, there is no way it will return 15% per year over the next 10 years.

    http://bit.ly/1ttNtVF
    Nov 1, 2014. 10:37 PM | Likes Like |Link to Comment
  • American Realty Capital Properties: "A Pretty Crushing Blow" [View article]
    ""the dividend is not in question""

    Having bought in after the crash, and having read the CEO's conference call, I happen to think that it is not assured that the dividend will continue at the current level. I think this essentially because of the high payout ratio that will result from the restated AFFO. On the other hand, I bought in on the assumption that the stock price is now way below NAV -- the real estate is still standing and the rents are still coming in.

    When I get the time, I will try to figure NOI and apply a cap rate to get the value of the real estate. But for now, it is just my sense that ARCP is selling way below NAV.
    Oct 31, 2014. 01:47 PM | 2 Likes Like |Link to Comment
  • Disaster Strikes For American Realty Capital Properties [View article]
    Book value (which is based on the depreciated accounting cost of the propeties) has little relevance for equity REITs. I doubt you will ever see 4, because of the underlying value of the real estate. But the stock price will be volatile, and there is a high probability that the dividend will be cut. The question is, does one buy today, tomorrow, next week, next month, or next year?
    Oct 29, 2014. 12:27 PM | 7 Likes Like |Link to Comment
  • Disaster Strikes For American Realty Capital Properties [View article]
    Less risky than yesterday!
    Oct 29, 2014. 12:09 PM | 20 Likes Like |Link to Comment
  • The Case Against TravelCenters Of America [View article]
    With his focus on free cash flow, the author seems to show very little understanding of the business model. TA is a highly leveraged company in an improving business environment. EPS will show gains through expansion, upgrading, and gains in truck shipments; TA will earn $0.84 this year, $1.13 next, according to Citigroup, which has a $14 target price on the stock.

    Disclosure: long TA.
    Oct 23, 2014. 12:37 PM | Likes Like |Link to Comment
  • With Increased US Oil Production, Buy Exxon Mobil On The Pullback [View article]
    Another day, another article about XOM. Designed to catch page clicks, no doubt. Plus, it's another feeble article by Don Dion.

    If the theme is that the US will produce more oil, why choose XOM, a company that operates in 50+ countries and that has large, worldwide investments in refining, marketing, and chemicals, in addition to oil and gas production? And if the investor wants an ultra large company, why not choose a company with a better dividend yield, a lower PE, and higher forecast growth, such as CVX, or COP?

    Actually, why not invest in a primarily domestic oil producer with a stake in shale oil plays, such as PXD, or EOG?
    Oct 14, 2014. 03:20 PM | 2 Likes Like |Link to Comment
  • Why I'm Buying Up Coal Stocks [View article]
    @tailguy
    Let see. Medicare has 5-10% in administrative expense. Private insurance (check United Health, for instance) has 25-30%. Fresh Direct constantly leaves boxes of groceries on my front steps, intended for a customer with the same street name in the next village. Fedex misdelivers sometimes, and have you ever tried to deal with Verizon "Customer Service"? They screwed me more than once, and then they screwed my credit rating!

    Plus, what incentive is there for a private company to get into Ebola screening? There has been just 1 customer so far.
    Oct 6, 2014. 08:16 AM | 3 Likes Like |Link to Comment
  • Why I'm Buying Up Coal Stocks [View article]
    There is a lot of ignorance in these comments.

    8.2 million tons of coal was exported to China in 2013, mostly through Baltimore and Norfolk, VA, the 2 principal US coal ports. However, 4.5 million tons was exported through Seattle, to various countries, including China.

    http://tinyurl.com/msm...
    Oct 5, 2014. 11:45 PM | 1 Like Like |Link to Comment
  • 4 Reasons To Have Exxon Mobil In Your Portfolio [View article]
    """Exxon Mobil Corporation . . is an oil and gas company based in the state of Texas. It is divided into three segments - upstream, downstream and chemicals. Upstream predominately deals in energy exploration and development, while downstream covers the distribution and production of fuels. Lastly, chemicals is the segment which deals in the production and sales of petrochemicals"""

    Are you kidding me?

    Nothing new in this article that is not on the company website, or in numerous other articles about XOM on SA. XOM is also in the top 3 with respect to market cap. It has a lot of shareholders and the article is simply here to attract attention to the author and draw a lot of clicks.

    """Recovering earnings"""

    What recovering earnings?

    Analysts (Yahoo) estimate $7.72 for 2014 and $7.58 for 2015, a 2% decline. The estimate for 2014 is down from $7.78 90 days ago. There will be further downward revisions when analysts factor in the recent sharp decline in crude oil prices.
    http://bit.ly/1sZDqTy

    """Book value steadily rising"""

    Book value, which is based on the depreciated accounting cost of investments in oil and gas production, is probably a poor measure of value for integrated oil companies. Acquisition values of oil companies are usually based on the value of the oil and gas reserves found, not on how much was spent finding them. As to buying back own shares, XOM is an excessively conservative company when it comes to capital expenditures, and they probably passed up many opportunities for reinvestment in oil and gas drilling. XOM had to play catchup, by buying XTO a few years ago. They would probably have been better off if they had ventured into fracking and gas development sooner, instead of buying back their own shares to offset the shares issued in exchange for XTO.

    In any case, XOM sells at over 2 times book, while all major competitors sell at ratios that are much below 2 times.

    """The stock pays a 2.9% dividend yield and has an 11.7 PE, which is in line with its energy industry peers like Chevron and ConocoPhillips"""

    COP yields 3.9% and CVX yields 3.6%. By my source, XOM sells at 12.0 X earnings, while COP is at 11.5 Xand CVX is at 11.2 X. Finally, XOM lags badly on the dividend adjusted PEG ratio (using 5-year earnings growth projections). The number for XOM is 2.0, vs 1.2 for CVX and 1.0 for COP.
    Oct 4, 2014. 02:10 PM | 5 Likes Like |Link to Comment
  • Crunch Time For UMH [View article]
    Thank you for an excellent analysis.
    Oct 3, 2014. 10:09 AM | Likes Like |Link to Comment
  • Trick Or Treat, You Can't Beat This REIT [View article]
    @greentube
    Do you have any complaints when the ETFs buy REITs?
    Oct 2, 2014. 04:32 PM | Likes Like |Link to Comment
  • New York Times surges on newsroom cuts, Q3 improvement [View news story]
    @gedank
    What is the relevance of what was reported over 60 years ago in today's world? Today, the Times is one of the very few primary news sources, and, in case you haven't read it lately (perhaps you cannot afford the $2.50 newsstand price), Times covers many topics very well.
    Oct 1, 2014. 11:42 PM | 2 Likes Like |Link to Comment
  • United States Urges Tougher Curbs On Citigroup's Argentina Crisis [View article]
    Right with you on C and BAC.
    Sep 29, 2014. 09:46 PM | Likes Like |Link to Comment
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