Winthrop Rlty Tr (NYSE:FUR)

CAPS Rating: 2 out of 5

The Company is engaged in the business of owning real property and real estate related assets.


Player Avatar Option1307 (29.68) Submitted: 10/6/2010 10:51:39 PM : Outperform Start Price: $9.98 FUR Score: -25.27

This is the first time I have been interested in REIT's in a long time. I was a big fan of them in summer of 2009 and went heavily long; however I sold out of most of my positions in January of 2010 as I didn't like where the overall market was at and felt that many REIT's had gone too far too fast for my liking. Yes I have missed out on some future gains, but I slept much better at night knowing that my gains were locked in.

So why am I interested in them again you ask? Excellent question Fools.

First off, I'm not excited about the whole sector like I was before, in fact, FUR is currently the only REIT that I am actually interested in and would advocate starting a position in and/or adding shares.

Winthrop Realty has a management team that has proven itself to be dynamic and a cohesive unit and they have proved this time and time again during the past few years. Yes times were difficult, but they always seemed to manage the situations and take advantage of any opportunities that presented themselves. Mainly, while a lot of other REIT's and companies were running for the hills during the downturn, FUR was scooping up various properties and taking the extra step to lock in tenants for their current properties. This added up to adding some nice properties on the cheap all the while maintaining an occupancy rate around 90% throughout the crisis.

Shareholders usually complain when companies dilute their shares; however, I have to say that I agree with the management's decision to do so, and multiple times with the most recent coming just a few weeks ago (Sept 21st they issued 3M shares). Why for? Because management is smart and is betting they can put the extra cash to good use right now while there are still deals to be had. IMO, FUR is doing an excellent job of setting itself up for several years of above average returns by locking in good prices/deals/RE now while they are able to. Sure, nobody likes to see an extra 3M shares hit the market and sink the stock price, but in my view, this is only a short term setback and will greatly benefit the company long term. Remember patience is a virtue, so chill out! :)

With the 3M share offering, FUR took a nice ~20% haircut and is now back within spitting distance of some decent support at the ~$12 range. As I already mentioned, I feel that with this offering they significantly increased what their ultimate "value" is so this is a win win situation to be buying into Fools.

As with all REIT's, FUR has a sizable dividend to tide you over while you wait for better days to come. Currently it is yielding just over 5% which is definitely something to get excited about considering we may very well be in a range bound market for the next few years.

JakilaTheHun did one of the best write-ups I've ever seen on FUR a few months back, it's a must read for anyone wanting more details:

FYI, long FUR in Caps and RL

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