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Bryce_in_TX

Bryce_in_TX
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  • This Undervalued High-Dividend Stock Is Beating The Market And Has 6 Straight Dividend Hikes [View article]
    I am of the opinion that a $30 share price is a better entry point than currently. Don't you think we could see $30 again with rising interest rates?

    Long OHI.
    Apr 13 01:05 AM | 4 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    "You didn't understand a thing."

    Yes, I do. Check back with me on an annual basis over the next 5 years and I'll tell you how I'm doing with "O" and OHI. For 17 months invested in "O", I'm averaging about 10.5% annually. Long term, I anticipate doing just as well. For OHI, for the 5 months I've been in it, I'm averaging about 16% average annual return. I got into these stocks based upon Brad's articles. That says it all for me. Brad is making me money.
    Apr 12 10:58 AM | Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    "You didn't understand a thing."

    You're exactly right. You rambled, it was not coherent.
    Apr 12 10:38 AM | 3 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Union,

    "In reality, I've never witnessed a happy investor after having purchased shares which go down in price [ because ] oh, Joy & Happiness, I just lost 5 Dollars per share but can risk another $ 35. per share & buy more cheaper."

    I don't know what your beef is. Who can pick a bottom? So, how do you manage a stock purchase if you buy it, say "O", at $40, and as interest rates rise, it falls to $35? Why are you buying the stock?

    For me personally, I bought "O" at a good price, just below $38, and am adding to that position when it drops below $38 again. I never buy a full position at once because I realize the price can drop. I hold back cash in case of that event, and if it drops enough, I buy more. I'm in "O" long term. Interest rates will eventually rise, but they will also eventually fall again. I view the rate volatility as short term volatility (one to three years), not a death knell to my investment strategy. If it drops to $35 or lower as a result of higher interest rates, I will hold what I have and buy more and collect the dividend, knowing that at some point rates will peak and begin to drop and the share price will rise again and I will be in a better position than I was when I started.

    Brad is making me money. I'm also in OHI at around $30 because of Brad. Both REITs gradually raise the dividend over time. I anticipate the stock price rising over time as a result, with short term volatility in interest rates. Long term I believe I will make money in these stocks.

    Again I have no clue what your rambling is about. I love the dependable dividends which rise over time. Long "O" and OHI for the long haul.

    Btw, Kiplinger's is no different. They tout stocks and buy in prices. Sometimes they get it disastrously wrong. But they provide a valuable service to investors, digging up some gold pieces with the dross. It's up to each individual investor to determine if the stock and price recommended is good or not. I cant blame Brad or Kiplinger's for my own choices. No one is twisting my arm. If a person is that dependent upon an advisor, they are best to stay in bonds and CDs, not stocks.
    Apr 12 04:48 AM | 3 Likes Like |Link to Comment
  • Seadrill sinks as Credit Suisse downgrades, cuts target to $30 from $40 [View news story]
    Oh, you mean this Credit Suisse, the ones who lied about their 4th Qtr 2013 preliminary net income, and the Credit Suisse who was caught aiding and abetting individuals evading U.S. Income Taxes.......that Credit Suisse?

    http://bv.ms/1kQst46

    http://bloom.bg/1hpGp6p

    Well, they certainly have a lot of credibility. (Cough, cough)
    Apr 11 10:02 AM | 13 Likes Like |Link to Comment
  • You Must Know This About REITs [View article]
    Thanks for the encouraging article as it relates to interest rates. I bought O and OHI for long term retirement income. Share prices will rise and fall over time, but long term I look for both to rise gradually due to the ever increasing dividends paid by both. Enjoyed the article.
    Apr 9 06:19 PM | 3 Likes Like |Link to Comment
  • Tesla Motors launches business leasing subsidiary [View news story]
    Even at $5 a gallon, the total out of pocket expense on a Honda Accord would be about $58K over 10 years. Still less expensive than a Model S by a considerable margin. I figured 26 mpg. A 4 cylinder would be 30 mpg, so the cost would be less using the 30 mpg, around $55K.

    Total cost is a mortgage payment, but it depreciates in value, not appreciates, like a home.
    Apr 8 05:16 PM | Likes Like |Link to Comment
  • Tesla Motors launches business leasing subsidiary [View news story]
    A Model S is cheaper in the long run than a Honda Accord? Nupe. $28K for the Accord, plus 12,000 miles a year for 10 years, 26 mpg avg. Total cost around $44K. Throw in 4 oil changes a year at $30 a piece times 10 adds $1200. Add $5K for other repairs and you're looking at $50K total. Add 4 transmission fluid changes and several radiator flushes and you add another $1K. Tesla doesn't come close.
    Apr 8 04:02 PM | Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Still no sign of FFO or AFFO in Ned Davis's Research Report. They are using GAAP earnings. Maybe Brad could expound on cash flow. I suspect what they are using cash flow wise is the Cash Flow from Ops and not FFO.
    Apr 8 03:27 PM | Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Bottom Line:

    I give a lot more credence to Brad and his actual experience in this industry, versus an investment company which appears to use primarily GAAP metrics. I think $40 is a little high for my comfort level to invest at, but I think a 1.1 rating out of 10 (Fidelity) is wayyyyyyy out of line and based upon less credible GAAP metrics primarily.

    Banking on "O" as a retirement income vehicle for both myself and my son. Long "O".
    Apr 7 06:01 PM | 4 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Fcarone,

    "I do agree certain benchmarks (EPS & GAPP accounting) are not acceptable REIT evaluation metrics. Don't you think the service companies I cited in my comment know this? Don't you think they know what a REIT is and how they are typically, professionally evaluated ( FFO / particularly AFFO"s) ? Do you think they have not reviewed their recommendation accordingly when criticism of them came in from investors that thought they inappropriately used EPS and GAPP? How do you know they rely exclusively on GAPP and EPS ?"

    I don't see anywhere on Fidelity's analysis provided for "O" where FFO or AFFO is mentioned. The metrics shown, and which I have to assume the ratings are based, are primarily GAAP metrics. I can post the analysis if you want me to. No, I don't believe that the investment firms which Fidelity uses for "O"'s analysis use FFO or AFFO in their analysis. It's not listed anywhere in their reports that I see, only GAAP related metrics primarily.

    Example Report from Columbine Capital:

    The factors that impact their rating the most:
    (1) "Industry Momentum is Very Unfavorable
    Being in a strong-performing industry can have a carry-over effect that influences the investment prospects of the individual stocks. We measure the performance of a company's industry group over the past year in comparison to the market as a whole."
    (2) "Return On Equity is Very Low
    A measure of the rate of return on the ownership interest of the common stockholders. Return on equity reveals how much profit a company generates with the money shareholders have invested. In most sectors higher return on equity is better for future stock performance."

    ROE is a GAAP metric. Needs to be given little weight with an equity REIT, IMO. Columbine gives it the most weight. What more need I say?

    Factors that are "high" in consideration of Columbine's rating are:
    (1) "Cash Flow is Very Unattractive
    Positive cash flow gives a company funds for internal expansion, acquisitions, dividend payments, etc. Our evaluation looks at a company's cash flow over the past four quarters. Stocks favored by this measure have the highest cash flow available for their price."

    Again, this is the GAAP Cash Flow from Ops. I assume not FFO. CFO includes items not included in FFO. "O" must pay out at least 90% of its taxable income annually in dividends. Naturally, its CFO is going to be lower than C corps who can retain more cash for internal operations and capital expenditures. I don't see why "O" should be penalized for having to pay out more of its cash in the form of dividends.

    (2) "Estimate Trends are Very Negative
    Companies that are the subject of increasingly improving earnings forecasts tend to find favor with investors. We evaluate the changes over the past sixty days in Wall Street analysts' estimates of a company's future earnings using measures of diffusion, magnitude, and extremes."

    This is a GAAP earnings metric. I would give little weight to this metric.

    The list goes on with five more GAAP earnings metrics. So, 7 out of 11 evaluation metrics are based upon GAAP.

    I have to conclude these companies are basing their valuations primarily on GAAP metrics, rather than FFO, AFFO, and metrics which include these alternative evaluation metrics. I don't find your assumptions about Fidelity reasonable based upon my research.

    It would take time, but I could post some of the reports (all 12 if you wanted to see them) for you to see. But since you use Fidelity, yourself, you have access to the same data as I. I honestly don't see the reports as credible because it appears to be based primarily on GAAP, and I don't see FFO or AFFO anywhere in the analysis. Since you have access to Fidelity's analysis, show me where FFO or AFFO are considered. I don't find it.
    Apr 7 05:46 PM | Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    And $35 is a better price than $40, obviously. With rising interest rates, it may get that low or lower. I will hold what I have and buy more. I am in for the long haul with a rising dividend and gradually rising share price as a result.

    Fidelity advised me not to invest in their Oil Services Fund and Nat Gas Fund. When their Oil Services fund tanked at $33 a share in 2008 or 2009, I bought in with both feet. Had I followed their advice I would have missed out on a 100% return on my money. Professional Investment Advisors seem very skiddish to advise a client to invest when things have tanked. The reality is that is the time to be buying in, leaving some cash on the side to buy more if prices decline more. The only way you are going to lose is if the market fails to turn around. If that happens, the capital markets as we know it will cease to exist.

    With "O" thus far, I am averaging about a 9% a year return, since Nov. 2012.
    Apr 4 04:28 PM | 4 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Jm_is,

    "A P/E of over 60, and a payout well in excess of earnings."

    How can the P/E of over 60, based upon GAAP earnings be credible?

    GAAP earnings exclude the rise in FMV of assets, and instead depreciate the assets over time. As in my example of the $500,000 cost of a property, at the end of 5 years that property can be sold for $575,000, but GAAP only reflects a value of $455,000. Instead of GAAP reflecting the gradual rise in value of the property, both in the carrying value on the balance sheet and on the Income Statement as part of annual earnngs, GAAP waits to reflect the increase in value until the property is sold.

    Obviously, the rise in FMV of an asset which consistently increases in value, such as real estate, is an increase in net worth and income. That needs to be reflected as it occurs, annually, and not wait for 20 or 40 years to reflect the change in value. GAAP fails to do that, and as a result, understates net income on an annual basis. That is why the P/E and GAAP earnings are materially distorted and wrong. REIT industry professionals have had to resort to alternative economic metrics as a result.

    Obviously, a company continually paying out well in excess in earnings can not stay in business for long. The longevity of "O" and ability to increase the dividend should also be a signal something is wrong with the GAAP numbers.
    Apr 4 03:11 PM | 5 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    kid,

    The long term track record of "O" contradicts your statement. The compounded average total return for "O" since 1994 is 16.3%.

    http://bit.ly/JL5mLG

    I''m in this long term. If higher interest rates causes "O"s price to decline, I'll buy more to average down my basis. With a steadily rising dividend, the share price is going to rise, long term.
    Apr 4 02:18 PM | 3 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    FCARONE,

    My point is that some of the investment houses base a material portion of their evaluations on GAAP numbers. As I and RWMostow have stated, GAAP gets it very wrong for equity REITs, like "O". Any evaluation of such REITs based upon GAAP Net Income metrics, to include price to earnings, is going to be very materially wrong. That is what I am saying.

    Let's take a $500,000 new property, land valued at $100,000 and the property at $400,000. GAAP places this property on the books at $500,000, its cost. After 5 years, let's say the property has appreciated in value by 15% (3% a year). So, FMV, the price it could be sold at, is $575,000. But the net value of the property on the GAAP financials is $455,000. ($400,000 less $50,000 salvage value divided by estimated useful life of 39 years. I'm assuming GAAP useful life is the same as the tax life.)

    There is a $120,000 variance in the FMV and GAAP book value. Also, the increase in FMV of the property has not been reflected in the GAAP Income Statement. All of this materially distorts GAAP Net Income and the carrying value of the property, which distorts any financial ratios based upon these GAAP metrics. Extend that out to 39 years and you have an even bigger distortion.

    How is that cheerleading? Are you saying GAAP has no problems and the investment houses are justified in evaluating the REITs on GAAP metrics? I don't think so.

    As I said, Fidelity shows TTM earnings as $ .71. That is GAAP Net Income from continuing operations. I've already pointed out the weakness in that metric and any ratio using that metric. It fails to include the appreciation in value of the property (assets) and the depreciation also distorts actual results. (A property fully depreciated still generates revenue, meaning the depreciation charged needed to be adjusted downward annually since the property continues to be used. See page 56 of the 2013 10-K for the $ .71 per share income from continuing ops.

    http://1.usa.gov/1gumrlO
    Apr 4 01:51 PM | 7 Likes Like |Link to Comment
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