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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (35052)	11/9/2009 9:16:30 PM
From: Grantcw	Read Replies (1) of 78744

Thoughts on SPPR earnings? My thoughts: Cons: 1) They seem to have missed some debt covenants and have obtained waivers for these covenants. 2) They've rolled the $9-$10M 9/30 Debt Payment to Wells Fargo to a payment due on November 12th (this is a negative because I expected them to have already paid this off). Pros: 1) They've sold many hotels for an overall gain, showing that their hotels can be sold above book value. 2) Stock is still selling significantly below book value, which may be a semi-valid book value given #1 above. 3) RevPar is down less than the industry. No net income this quarter but still positive FFO. My overall thoughts are that I'm glad I've sold most of my individual hotel stocks. This quarter has been a very negative quarter for hotel companies and though I missed selling AHT, FCH, and BEE at the highs, I'm not looking to buy them back at cheaper levels now. SPPR is doing better than most from an operational perspective and may have value here, but on the other hand, I'm glad I don't have a big positon (and don't recommend one) given the covenant waivers and other debt issues they're working through. cw

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