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

To: Paul Senior who wrote (34564)	5/25/2009 12:28:08 PM
From: Grantcw	Respond to of 78748

Hello Paul, I like your Financial Analysis on SPPR. And to me, the scenario you layout of a 12% return is almost enough right there to consider investment. Here are some other positives: I think that FFO will improve from the $35k once the economy gets some footing. In the meantime, they're at $296M of property value vs. $192M of mortgage. A difference of $100M vs. $34M of current market capitalization. Given that RevPar has dropped about 1/2 the national average for their hotels, I'm believing that the property value is still relatively reasonable. They're in the process of selling hotels to improve their balance sheet. So, to me, it's a matter of getting some decent FFO now, even after the drop in RevPar nationally, and waiting for the economy/banking system to recover. But, if the stock bounces in the meantime like AHT did (4-5x from lows), I would take my profits in the short-term and move on to something else. Thanks, cw

To: Paul Senior who wrote (34564)	6/18/2009 2:59:30 PM
From: Grantcw	Read Replies (2) \| Respond to of 78748

We were lucky to get out of AHT. It was gotten whacked over the last week. The risk on AHT, from my understanding, is that they've bought a good chunk of their portfolio in the last 5 years and therefore their PPE could be higher on the books than in market value. Their mezzanine loans seem to have gotten them down recently though... That being said, I bought some more FCH today as, if my calcs are right, I've got, from their financial statements on yahoo, a PPE/Room of $91k vs. a debt/room of $62k, and a big portion of their portfolio is in Embassy Suites. $91k room is a very favorable ratio compared to my analysis of the other Reits and based on the fact that they're mostly a Suite Hotel owner. The name of the game these days in Hotel Reits is to be a survivor, and I don't see them being underwater from a market value to debt perspective. Also, they did a huge renovation of hotels in 2008 and are gaining market share, with few purchases of hotels in the last few years. Still down seemingly 90% from its high. I see it coming through this mess. Still like SPPR which has not fallen much in the last week though Hotel Reits have in general. cw