Resource Capital Corp. (RSO)

Correcting past mistakes and paying a dividend.

True value is minimum 7.50. Could go much higher.

As far as REITS go, RSO has consistently paid good dividends throughout the storm. Their financials are as good as anyone's considering the economy's wear and tear on companies in this market. Strong management team as well.

Its not the value or potential for value increase. Its the dividend stupid.

Management reaffirming dividend inspires confidence that they do not see a cash crunch coming.

dividend >20% p/b <1 positive earnings

This company finances commercial loans. From their conference calls they appear to be very conservative, and therefore have a low default rate. This stock is down because investors have moved away from this sector in general. While I wait for a recovery I also get paid 18-20% dividend. Not bad...

Great dividend. Hopefully will pickup in a year or two.

Resource Capital Corporation operates as a specialty finance company focusing mostly on commercial real estate and commercial finance. The company invests in commercial finance assets and has elected to be taxed as a Real Estate Investment Trust (REIT).

The company was founded in 2005 and is headquarted in New York, New York.

RSO has forcast earnings of $1.40 / share and a P/E of $6.39. With a current share price of $9.00 per share, the company lookes like a good stable operation. However the share price has been as low as $6.00 but as high as $18.00 per share.

It is likely that the current share price has more to do with the recent problems of the sub-standard mortgage industry in general, than it has to do with the performance of Resource Capital Corporation in particular.
The company is forcasting growth in earnings per share of over 15% over the next one to three years, making it a relatively stable, conservative play.

As the mortgage market stabilizes, it would not be unreasonable for Rescource Capital Corporations shares to increase between 50% and 100%.

From my short ideas/valuation screen

Yet another stock crushed like a tin can by the real estate/credit crisis-recession. There are a number of real estate trusts such as this one that pay out a big dividend but had their ticker prices pushed down by the market. Some with good reason, some with not. While RSO has a fairly high debt load, they own their assets which in my opinion mitigates some of the risks with investing in this trust. Along with many other trusts in this category, their ticker was pushed down 54% over the past year and the curve follows other similar companies. It was that drop in price along with the dividend that made me decide to take a chance on this company.

overvalued

Getting ready for an upward run. Great dividend and an cheap at this price.

Great management, 10% stock buy back already authorized, 14% yield, insider buys, good earnings, diversifed projects. Credit market conditions reflect on this stock. See past the turbulence and lots of upside to be had.

-20.8% -$1.97 8/1/07 4PM
3star caps rating
+78 -4

buying on a down day

REIT that has to pay-out 90%. Annual Yield 10% at this price (@$16). Insiders recently buying (heavily) at this price. Given all the M&A activity of late (taking out all my LONG positions, by the way), I want to watch this sector.

Price depressed because grouped with housing sector and sub-prime loans. Even Commercial Real Estate is selling off recently.

Looking at the "team", their savvy, their experience, and their wide exposure to many important sectors (life sciences, biotech, energy, financials, etc), I see this potentially as a "specialty finance REIT" (which seem to be proliferating these days). Is this another name for a hedge fund? I'm not experienced enough to know for sure. But, I want to watch closely. Watch for the bubble effect. Could pop any moment. May have to get out quickly. Or, may be a very fine LT play. Looks like a good ole boys network type company. Even 2nd generation! Hmmm. Suitable for CAPS. Need to do more DD for RL portfolio.

$26 million insider buying at $16.+. Expected to increase dividend next 3 quarters. Paying 10% at todays price. 15.35

Back to yield. nearly 9%

RSO finances mostly commercial properties. I think a bit of bubble has been built into the share price.