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

To: Spekulatius who wrote (35052)	8/8/2009 7:30:59 PM
From: Arthur Radley	Read Replies (2) \| Respond to of 78751

Spek, Concerning SPPR, I guess you and me have different ways looking at a company. (:>) I respectfully disagree on this company, because IMO they are a disaster in the making. First item is their contention that their ADR was below the industry average, when in reality they operate low revenue generating motels and for them to even give up 3.5% on daily rentals rates is going to impact them because of fixed expenses. Also, they fully admit they have a huge debt payment coming up next month(Wells Fargo) and it appears they are being forced into selling properties to meet this obligation. If they can't unload the motels that they already have on the market....where are they going to get the money to pay off Wells Fargo. The summer travel season is over.......who would want to buy a motel now...unless they can get a huge discount???? My point is simple.......SPPR is selling off motels to meet debt obligations....that ain't a good sign. (IMO)

To: Spekulatius who wrote (35052)	11/9/2009 9:16:30 PM
From: Grantcw	Read Replies (1) \| Respond to of 78751

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