RAIT Financial Trust (NYSE:RAS)
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The Company is a specialty finance company that provides a comprehensive set of debt financing options to the real estate industry.
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The Company is a specialty finance company that provides a comprehensive set of debt financing options to the real estate industry.
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RAS share price has been under pressure because of recent senior notes which are convertable at or above 2.56 and a large short position in the stock. However this has given me an additional chance to get shares at a discount. Here are some pros I like about RAS;
1.RAS is undervalued illustrated by a low BV 0f 8.67
2. $4.36 cash per share
3.Occupancy rates for RAS's properties have improved dramatically!!
4.RAS has decreased their debt dramatically!!
5.Current economic environment is favorable for Multi-family rentals because fewer people are able to get loans and need to live somewhere while they are saving money.
6.Improving dividend. I like RAS B/c they are benefiting from MB securities but have hard assets as well. IMO this should prevent them from getting hit hard when interest rates begin to increase. That is why I sold my CIM and bought more RAS.
7.RAS has a trailing PE of 2.
8.ROE above 13 percent.
9.Large short position could be a pro, if there is a short squeeze.
good post, wanted to wait to buy after1 for3 split, and debt cealing prob!
The Debt Ceiling prob solved and the split happened and RAS had some pretty good earning this quarter and still nobody cares. It wouldn't surprise me to see this stock back into the $3 range(where it started before the split) by the end of this quarter. Nobody is going to invest in this REIT unless it can start paying consistant quarterly dividends. Which is kind of the whole point of buying REIT's. Investors want the cash flow. So unless RAS announces quarterly common stock dividends again this stock is not going anywhere soon. Sorry it just isn't. I hope I am wrong because I hold a position in it. But I am in for the long haul(3 - 5 year time frame). If you have the patience to wait 3 - 5 years then you should be good.
I bought shares at $6.00 and more at $4.80 or 1.60 pre-split.
RAS has already re-instated a quartly DIV of 0.06 or 0.24 per year which is 5 percent at current prices.
I think they will be increaing the DIV over the next year or two thanks to increased interest income, income from IRT, and selling some properties.
RAS's AFFO was 0.22 in Q2 11' which is more than enough to pay 0.06 DIV or higher.
The reason everyone is selling is a GAAP loss of 0.53 thanks to a mark to market loss of $25.7 million.
Now if RAS had a BV of 0.53 that would be really bad. However with the current book value of over $20, RAS has a huge margin of error and could lose 0.53 cents of book value for the next 28 quarters or 7 years and still have a price/BV of 1.
RAS has already re-instated a quartly DIV of 0.06 or 0.24 per year which is 5 percent at current prices.
I think they will be increaing the DIV over the next year or two thanks to increased interest income, income from IRT, and selling some properties.
RAS's AFFO was 0.22 in Q2 11' which is more than enough to pay 0.06 DIV or higher.
The reason everyone is selling is a GAAP loss of 0.53 thanks to a mark to market loss of $25.7 million.
Now if RAS had a BV of 0.53 that would be really bad. However with the current book value of over $20, RAS has a huge margin of error and could lose 0.53 cents of book value for the next 28 quarters or 7 years and still have a price/BV of 1.
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