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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (33820)	3/17/2009 1:34:29 AM
From: Spekulatius	Read Replies (1) of 78753

The whole mess with these stock dividends is just BS and shows how bad the fundamentals of the REIT sector really are. the stock dividend really means a dividend cut, nothing else. It creates amongst other things a steady supply of stock at given dividend dates that is partly being sold. great for the shorts probably but for the shareholders? It does make the preferred look better at least in relative terms.For one thing we have cash versus paper but we also have the fact that the REIT preserves cash for the holders of debt and preferred. If these REITs were really worth what management and some brokerage reports are saying the solution would be simple: Sell properties and deleverage buying back discounted preferred and debt. But of course nobody is buying CRE right now, which of course means that these NAV are really BS as well by my logic. That said, preserving cash may be the only way for these REITs to survive, but then they should just call it what it is - a dividend cut to zero, IMO. The whole thing makes me think that this is just an industry to be avoided for at least a year if not more.

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