iStar Financial, Inc. (NASDAQ:STAR)

CAPS Rating: 3 out of 5

A publicly-traded finance company focused on the commercial real estate industry which provides custom-tailored financing to end private and corporate owners of real estate.

Recs

2
Player Avatar Sayder (61.74) Submitted: 7/15/2008 11:57:37 PM : Outperform Start Price: $14.71 STAR Score: -46.60

The only reason I can see for the dip in price to current levels ($8-9) is an undeserved correlation between their business and the downturn in FRE and FNM. iStar does make loans, but they are also a major property owner. One example is purchase lease-backs which give the original owner upfront capital and gives iStar a committed tenant, income stream, and a piece of property. Unlike companies like TMA who had to sell stock at depressed levels to raise capital to avoid margin calls and bankruptcy (diluting shareholder value), iStar was recently able to sell $750 million in senior securities without having to sell shares of stock. Additionally, they were able to sell or use their property ownership to open up additional cash. This money is not for avoiding bankruptcy, they are financially stable as it is, it's for investing! The sale of the TimberStar forestland is another property ownership example that made them $250 million in gains. This transaction, btw, closed April 1st and should blow the 2nd quarter expected earnings out of the water, give fairly good insurance for all dividend payments this year, and may even result in a special dividend. I am not as proud of their purchase of the Fremont loan portfolio, but they have priced in a heafty loss into the price they paid for it. Additionally, these were commercial loans and should pay off within 3 years. For the ones that don't, iStar is perfectly positioned with their property management group to own the properties and find the best way to make money from them, be it selling, or leasing them out. I am proposing current value somewhere around $22.5 and 2009 quarterly dividend of 80 to 87 cents. These guys are very committed to their dividend though and would only reduce it if there was no other option.

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Member Avatar sohmah42 (31.37) Submitted: 7/16/2008 2:14:41 AM
Recs: 0

you would think all these big shots in wall street would know this, i am sitting on 7000k shares of sfi @12, don't underestand the big fall within past few days, down 20k in matter of four days but i think as usuall wall street never made sense for me after 9 years trading, i guess once again this proves the munipulation and price fixing in wall street, i am just hoping there isn't an internal problem with the company that we as share holders don't know about?? I am not giving in to the panic selling of the market unless ISTAR proves me otherwise!!

Member Avatar sohmah42 (31.37) Submitted: 7/19/2008 2:35:10 PM
Recs: 0

I Know now why they sell the heck out of the stock, This proves to me there is inside information.

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