Value Investing Paul Lountzis at the Ben Graham Centre for Value Investing (2019) |
- Paul Lountzis at the Ben Graham Centre for Value Investing (2019)
- Stockpile or stockpile
- Dilemma: Impatience affecting returns
- SMTA, speculation play on small-cap REIT
- Market Cycle
| Paul Lountzis at the Ben Graham Centre for Value Investing (2019) Posted: 27 Mar 2019 04:29 PM PDT Good insights in a lecture by Paul Lountzis at the Ben Graham Centre for Value Investing [link] [comments]  |
| Posted: 27 Mar 2019 09:42 AM PDT In current market conditions, what's your strategy. I've slowed my buying and began to pile up my cash position and continued look for companies that I think are great companies even if they are overpriced assuming there will be a time in the near future I may be able to purchase them at a discount. I have an entire list of companies I love and prices I'm willing to pay them. [link] [comments]  |
| Dilemma: Impatience affecting returns Posted: 27 Mar 2019 01:43 PM PDT I've generally had excellent hit rates with my ideas. The sizing has been very good. However my impatience - I'm usually very early in the ideas ...which means that I often end up selling them well before their broader price discovery / rerating happens. If I somehow manage to hold them till the inflection point, the previous wait makes me again sell at the first 50% rise rather than stick it for the big gains. I've sometimes had mechanical rules like not selling a new idea for atleast 2 years but it's been really hard to stick to it. Any approaches that may help me avoid second guessing my own judgment and prematurely exiting many correctly apprised ideas ? P.S: This doesn't happen with every idea obviously and my overall returns are still pretty good but the mistakes weigh on my mind and I want to fix this big weakness. [link] [comments]  |
| SMTA, speculation play on small-cap REIT Posted: 27 Mar 2019 07:26 AM PDT Preface: I am not long or short SMTA I am awaiting more analysis, I want to hash through potential holes in my thesis. Criticism and scrutiny welcome and encouraged. The business: SMTA (SPIRIT MTA REIT) is an externally managed REIT formed in Maryland that invests in and manages a portfolio of single-tenant, operationally essential real estate throughout the U.S. that is generally leased on a long-term, triple-net basis to tenants operating within retail, office, and industrial property types. Spirit MTA was spun off from Spirit Realty Capital for risk mitigation purposes for latter's real estate portfolio. Basic Info: Price: $6.87 as of previous close (3/26/19) Market Cap: $295M Current Yield: 19.4% Beta: 0.59 (Nasdaq) Dividend history: Q3 18: $0.33 Q4 18: 1.33 Q1 19: 0.33 Analysis: The bad: SMTA has been absolutely hammered over the last six months, trading just below $12 in November to under $7 currently. Red flags for investors include SMTA carrying a negative book value of equity due to accumulating a deficit, despite slight increases in the debt structure in the company. The Company issued $150M in preferred equity in 2018. There is a legitimate concern that the company may go into liquidation. They have already written off a sizable portion of their debt. This is key: As of December 31, 2018 and 2017, there was an allowance for loan losses on loans receivable of $35.1 million. $33.8 million of the allowance for loan losses as of December 31, 2018 relate to an allowance on the B-1 Term Loan due from Shopko as a result of Shopko's bankruptcy. I am under the impression that this Shopko loss will be a one-off, but it is not the end of the road. From 2019-2023, Shopko owes SMTA $209M of $1,072M of operating leases (19.5% of total op leases over that period). SMTA has sold off a small amount of their owned properties portfolio, which has contributed to less revenue. Revenue over the past few hears has been stable, but not showing any signs of growth. The good: SMTA paid a special dividens of $1 on top of their regular dividend of $0.33 in Q4. Let's adjust this to assume a $0.33 dividend for for quarters for a $1.32 annual dividend. If the stock stays in the $7 range, this will yield 18.8%. Even when being conservative and assuming no special dividends, and no growth. And lets assume also assume since this company is not a going concern, so lets make the cost of capital higher than what they are currently raising. They issued Prefered shares paying 10% dividends, they have raised debt at effective rates of just below 6% interest. Assumptions: WACC. Using Duff and Phelps CAPM plus High Financial Risk Size Premium here. I would like some feedback on this part, if nothing else. Rf = 3.5% normalized Rf rate Beta= 0.54 SIC 6798 Median Beta ERP= 5.5% HFR Size Premium= 16.37% Total KoE= 22.8% Cost of raising further Preferred shares or debt will be more than in previous capital raises. I think using a weighted average of the cost of debt and preferred shares would inappropriately bring down the WACC. Reminder that the Dividend Growth Model is P0= D1/(r-g) Case 1: Let's assume no growth in the dividend over the next year for a divided of $1.32 over our cost of equity of 22.8%. This gives us a price of $5.79, indicating it is overvalued by about 17%. Case 2: Let's assume small growth in the dividend over the next year, continuing with their special dividend giving us $2.32 annualized, but no further growth in the future with the same cost of equity. This would give us a price of $10.18, indicating about a 40% upside. Case 3: The company cuts dividends to $1 annualized, and indicates no future growth, with the same cost of equity. This would give us a prive of $4.39, a 37% downside. Conclusion: This stock seems to have a lot of question marks, especially with recent capital raises and high financial risk. If you are willing to speculate and are optimistic of the company's performance and a similar year. I am somewhere between all three of these cases, and from the relatively small time I've put into this analysis, I would not be surprised in either direction. This is my first time posting a stock analysis on this sub. I would love your feedback. Do your own research :) [link] [comments]  |
| Posted: 27 Mar 2019 09:29 AM PDT Hi guys, I am trying to create a market cycle chart. I want it to have
Do you know whether anyone has attempted to create one? Thanks [link] [comments]  |
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