As always, the reit guys are chasing their tails looking for the one that they "missed." Sorry guys, there is a ton of downside here and I plan to capitalize on it. With all the renovations they have going on, there is no way they can do 6.5% to 7.5% revpar growth this year.
These guys are inexplicably selling EBITDA-producing properties and plowing the money into Embassy Suites hotels that have a ton of deferred cap ex requirements. There is no return on investment here. They are just bringing the hotels up to Hilton's standards so they don't lose the franchise. A lot of fch's Embassy hotels are 15-20+ years old and will never be strong competitors in their markets due to the glut of newer hotels like SpringHill Suites and Candlewood.
All the growth in 2007 is coming from one-time condominium sales which are very low quality earnings and smart investors will not give them credit for it.
If things are so great, why is first quarter guidance below consensus???
Ask the tough questions, guys. You're getting snowed by a few analysts and desparate longs. Thursday's rally was a complete joke and I've already got my short order teed up. This thing goes back to $22. Book it.
SpringHill Suites and Candlewood? you are kiding right?
These motels are not in the same ball game as Embassy Suites. FELCOR's Embassy properties all hold a solid postion in the market... the only risk I see with FELCOR is all the overhead at the corp office they seem to carry. And all these new kids they have hired ... No more than 10 years experiance in any of these guys.
Agreed. Been following the stock since the late 90s and yesterday's "pop" gave me the excuse to unload all of my shares at a small profit. As FCH climbed close to $25, I established a short position and began adding to it all afternoon. In my opinion, FCH @ $25+ might be a once in a year opportunity to profit on the short side.
Until GE Capital buys FCH @ $30. GE execs. have been meeting with FCH for months to put the deal together. Should be formally announced in April. Recent price surge due to leaks of the news. A likely buyout candidate is about the last place I would be short.