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

To: Spekulatius who wrote (33603)	2/21/2009 7:46:28 PM
From: Grommit	1 Recommendation Read Replies (3) \| Respond to of 78744

You may be right. I looked closer at both BDN and CLI. They each have +/-. CLI's debt/equity is only marginally better, and the interest coverage the same, blah, blah... but CLI provides a lot more useful financial and operational info. BDN is less forthcoming and requires more of a reliance that they can execute the plan, sell a few assets... But they say 2009 is nailed. I dunno. P/FFO and yield better for BDN. EV/EBTIDA better for CLI. Dividend coverage ratio much worse for CLI. Preferred is safer for all these days...

To: Spekulatius who wrote (33603)	2/21/2009 9:03:22 PM
From: E_K_S	1 Recommendation Respond to of 78744

Hi Spekulatius - I like the REIT preferrds but also believe that their gross rents will be less for FY 2009 and even FY 2010 and perhaps significantly less if the economy gets worse. BDN has been reducing debt and buying back notes. The preferred payout for BDN is approximately $8 million per year. The common payout costs the company approximately $106 Million per year. If BDN cuts their dividend on their common (for various reasons you stated), I was thinking that shorting the common while owning any of the preferred series might be a good hedge strategy. When HRP cut their dividend by 50% last month, the spread between their preferred and common widened. If the dividend is discontinued for any reason, shorting their common while owning the preferred might also be a good strategy. Other than day and swing trading this market, I am trying to think out longer term strategies for positions I want to hold w/o taking these 5%-15% hits down when the overall market trades lower. I have been hedging some of my other holds by selling covered calls but the premiums I get have not covered the longer term losses. I think you have been playing it pretty good by taking profits on your swing trades. However when the market finally turns, you may miss loading up the boat. I think we are far from a market turn higher and defense with capital preservation is the key now. EKS