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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: wlheatmoon who wrote (8030)	8/22/1999 7:51:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78625

Easy shot. Most people value FCH as the REIT that it is, so they use funds from operations as a key measure of performance. FCH dropped to new lows after reported FFO was not as high as expected. This coupled with an analyst downgrade tanked the stock. REITs are still not much liked by most investors imo, and FCH being a hotel REIT is even less favorable because investors perceive that in an economic downturn, hotel occupancy rates increase and/or revenue per room stagnates or declines. (Unlike commercial or apartment REITS with more stable income streams.) When you read the Yahoo posts you will see that several posters fault FCH in particular for overpaying for its past hotel chain acquisition plus criticize FCH for trying to upscale the hotels which they do have. Some believe FCH may be ineffective in trying to move away from the overly "hoteled" midprice market they are in. In short, not a pretty picture. I'm a buyer of FCH in low 20's and have added to my position as the stock has dropped into the teens. My reason for buying is that IF the company can maintain its dividend yield (now 12%), and IF I can find the patience to live with this company for a few years, I maybe might be satisfied with the yield (I'm old enough to have gone years with some companies and not seen 12% returns); plus I also expect somewhere along the line to get a chance to see something good happen to FCH stock. So far, the insiders seem to be buying or holding as you've mentioned, and that is possibly a good sign (i.e. at least I don't see the management bailing). FCH was discussed on this thread before. At the time, some people also liked LHO. You might look at that hotel REIT also. (smaller, but primo properties, imo; although the price has gone up quite a bit). You should also check with Richard Barron on his REIT thread on SI. His last post, for example---- and this one: Reply #1431, Date: Aug 4. If Jim Clarke on this thread offers a REIT for consideration... it should be considered. All JMO, I'm no REIT expert, not even good enough to be an amateur; just quick enough today to to respond -g-. Paul Senior

To: wlheatmoon who wrote (8030)	8/23/1999 1:24:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78625

Felcor sounds interesting. Hotel REITs are in the outhouse behind the doghouse right now. I own LaSalle, which pays an 11% yield, and I like management. They have done everything they said they would do a year ago, and continue to buy their own stock. I have looked at Felcor a couple of times on the way down and said yuck. One of these times its going to be a screaming buy. Thanks for the heads up. I'll look at it one more time. (But as Paul said, book value doesn't matter in this industry - all that tells you is what they (over?)paid for their properties. Maybe that was the right price, maybe not. I spent three years with a major real estate vulture fund in the last downturn, and we NEVER even looked at book value. Just watch cash.) My REIT buys now are Colonial Properties for the very conservative, and Host Marriott for those who want to take a little more risk - hotel REITs are about as out of favor as you can get, but there is no hotel REIT with a better quality portfolio or management than Host Marriott. 8.4% yield. And these are Marriott flagged properties. Take my word for it - whatever the macro environment for the next five years, Marriott flags are going to do a lot better than Felcor's hotels. JJC