Hi loilty, lurking is mostly what goes on here. lol!
RAS is new to me. I'm wondering how I missed it. I wish more would post on interesting dividend stocks.
Looks to me like a case of the baby getting thrown out with the bath water. Reits as a whole sure haven't been loved lately, and anything remotely connected to the word mortgage, even less.
Analysts seem to have figured something out, raising this years earnings from $2.10 to $3.69 in the last 90 days. At the same time they have raised '08 from $2.92 to $4.31.
They also own and rent, collecting almost $1 per share in rents each year.
S+P has a fair value of $33.10.
I found this interesting:
June 15, 2007
02:22 pm EDT... RAIT FINANCIAL TRUST (RAS 30.01) UP 1.78, JP MORGAN
INITIATES COVERAGE WITH OUTPERFORM... Analyst AndrewWessel tells
salesforce following recent acquisition of Taberna Realty, co. now able to provide
financing to owners of commercial real estate across all levels of capital
structure... Says combined platform should continue to produce spread income
from its term-financed commercial real estate financing assets, but he believes
real story lies in fee income generated from originating assets, as well as
structuring and then managing collateralized debt obligations used to
term-finance those purchases... Sets $45 12-month target. /STrombino
From RAS 2005 annual report:
"We emphasize mezzanine and bridge financing which makes up most of our loan portfolio. Our bridge
loans are generally first mortgages that we anticipate will be refinanced by our borrower in the short-term with
traditional institutional lenders and lenders that securitize loans in order to repay us. In general, our mezzanine
loans generate a higher rate of return to us than our bridge loans due to the additional risk we assume as a
result of their subordinated status."
buy them at a discount:
"We also invest in real estate by acquiring existing real estate loans held by banks, other institutional
lenders or third-party investors. When we acquire existing loans, we generally buy them at a discount from
both the outstanding balances of the loans and the appraised value of the properties underlying the loans.
Typically, discounted loans are in default under the original loan terms or other requirements and are subject
to forbearance agreements. A forbearance agreement typically requires a borrower to pay to the lender all
revenue from a property after payment of the property's operating expenses in return for the lender's
agreement to withhold exercising its rights under the loan documents. We will not acquire any loan, however,
unless material steps have been taken toward resolving problems with the loan, or its underlying property. We
seek to acquire loans for which completion of the resolution process will enhance our total return through
increased yields or realization of some portion or all of the discount at which they were acquired."
"We generate a return on our consolidated real estate interests through our share of rents and other sources
of income from the operations of the real estate underlying our investment. We may also participate in any
increase in the value of the real estate in addition to current income. In appropriate circumstances we may also
seek to enhance our return on these investments by ""leveraging'' or borrowing against this real estate
underlying our investment."
I'd be a buyer here. The yield looks high, but imo if the analysts are anywhere near right, the payout will go higher and the yield down.
Thanks for bringing it to my attention. |
