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EnigmaDude (92.82)

fire sale on REITs

Recs

4

May 07, 2008 – Comments (7) | RELATED TICKERS: CSE.DL2 , RSO , AFN

My post is based on a similar post by jstran, who beat me to the punch.

I was going to write about how several of the REIT stocks that I have been following might have reached a bottom. They look like they might be able to sustain the nice dividends they are paying out, and may even avoid bankruptcy or delisting.

This week included positive earnings reports from AFN, CSE, and RSO.  The post from jstran also mentioned RAS, which looks like another good possibility.  A hotel-related REIT that I have been following is SPPR, which also has potential even in this current economic downturn.

"CapitalSource Inc. (NYSE: CSE) today announced financial results for the first quarter 2008. Adjusted Earnings for the quarter were $113.3 million or $0.51 per diluted share, and net income for the quarter was $6.8 million or $0.03 per diluted share." (analyst consensus was for $.50).

"Resource Capital Corp. (NYSE: RSO) a real estate investment trust whose investment strategy focuses on commercial real estate loan assets and, to a lesser extent, commercial finance assets, reported results for the first quarter ended March 31, 2008. Adjusted net income, a non-GAAP measure excluding the effect of non-cash charges and non-operating capital transactions, of $10.4 million, or $0.42 per share-diluted for the quarter ended March 31, 2008 as compared to $9.4 million, or $0.38 per share-diluted for the quarter ended March 31, 2007, an increase of $1.0 million (10%). (analyst consensus was for $.42).

 "Alesco Financial Inc. (NYSE: AFN) (AFN), a specialty finance real estate investment trust, today announced financial results for the three-months ended March 31, 2008.  AFN reported Adjusted Earnings, a non-GAAP measure of performance, for the three-months ended March 31, 2008 of $20.2 million, or $0.34 per diluted common share, as compared to Adjusted Earnings of $17.2 million, or $0.31 per diluted common share for the three-months ended March 31, 2007."  (analyst consensus was for $.27).

7 Comments – Post Your Own

#1) On May 07, 2008 at 2:38 PM, goldminingXpert (29.38) wrote:

no no no. Totally wrong. Look at SRS (the ultrashort REITS)... it is in the basement. Real estate is about to get crushcrushcrushed.

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#2) On May 07, 2008 at 3:08 PM, bridgeboy0 (30.61) wrote:

So, if I understand golminingXpert's argument correctly: since REITs have started to rebound (SRS has been going down) REITs will go back to getting crushed.  That seems a bit wrong to me.

 I haven't looked at the 4 REITs in particular that you mentioned in this blog, but I picked up about 15 in CAPS back in January/February (plus added to FRESX in real life), so I would tend to agree with you that REITs may have bottomed here.

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#3) On May 07, 2008 at 3:12 PM, bridgeboy0 (30.61) wrote:

So, if I understand golminingXpert's argument correctly: since REITs have started to rebound (SRS has been going down) REITs will go back to getting crushed.  That seems a bit wrong to me.

 I haven't looked at the 4 REITs in particular that you mentioned in this blog, but I picked up about 15 in CAPS back in January/February (plus added to FRESX in real life), so I would tend to agree with you that REITs may have bottomed here.

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#4) On May 07, 2008 at 4:25 PM, EnigmaDude (92.82) wrote:

Thanks for the comments. 

SRS did get a nice bump up today, but YTD performance is down nearly 10%.

I'm not convinced that now is the time to run out and stock up on REITs, but they are looking less like falling knives than they did a few months ago. It will be interesting to see what the next quarter's earnings reports look like.

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#5) On May 07, 2008 at 4:28 PM, PhillyGator (< 20) wrote:

I'm a Tag leader in REITs and I have no idea which way these are going. Any guidance, good sites for further research. I'm especially interested in trying to find REITs NAV's. The idea being, if the underlying real estate is higher than the price of the stock, safe bets. Any guidance let me know!

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#6) On May 08, 2008 at 11:53 AM, edwjm (99.87) wrote:

PhillyGator:  I have added you to my fav list to make it easier to track how your picks fare. 

For those who don't know, PhillyGator red-thumbs reits, some of which I own in real life.

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#7) On May 08, 2008 at 3:34 PM, PhillyGator (< 20) wrote:

Edwjm, like I said, I have no idea right now.  If you have stocks in good companies like ProLogis, you're probably in good shape. My picks are very short term for the purpose of this game, so I wouldn't put much stock in my picks long-term.

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