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RAIT Financial Trust Message Board

  • sme20_98 sme20_98 Feb 15, 2013 8:16 AM Flag

    Success of RAS not here yet

    We need to settle down about how great RAS is doing. It was not that long ago that we took a 1 for 3 reverse split. This $7 stock price in my mind is really only about $2.40. Back in those days, the stock would routinely tarde over $3 so we are still a long ways from screaming the successes and talking "up 27% on the year. Its still an extremely depressed stock unless you are a trader. I am an investor and have held the stock for years and while we might be SLOWLY headed in the right direction, its far from a success story at this point. I wish RAS had the quarter NRF had. Something I still can't understand is why in an improved financing market the Tambernas liability valuations don't begin to stabilize and thus would not continue to need continued mark to market increases quarter after quarter. There is no question that the continued GAAP losses are part of what is depressing the stock price. There really shouldn't be any fist pounding of successes until we see a stock price at $10 to $12 and quarterly GAAP losses of $1 a share are not going to get it done. Thats why I wanted to see more of a plan on the conference call about the Tambernas liability. Maybe next quarter.

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    • Everything is relative. Three and four years ago RAS was trading on more on hype ... from both the long and short side ... than hope, and when it traded at these prices the prices weren't sustainable for more than a month or so between troughs that leasted most of a year. The high volatility associated with that was driven by earnings variations, and especially big moves in GAAP earnings, which I generally warned people away from in favor of longer term measures that suggested the long term probability of a dividend that we actually got two years ago. I hate to burst your bubble on the "routinely trade over three bucks concept, but RAS has traded over $9 (the post-split $3) for less than three months of those four years. Routine (most of those four years) has been a range from about $1.33 to $2.33. We're making what may be the first sustainable move above that price range now, and that sustainability depends almost entirely on the dividend.

      Unlike three years ago RAS is increasingly trading (and on favorable terms for a MREIT) on its dividend. That provides realistic support that makes it a lot harder to push the price down very much. The price has been rising fairly steadily for 18 months and has attracted some large institutional investors. I'm sure that the highs of the price spike $3 years ago look great by comparison, but the real measure of a price move is its sustainability. If we get a 12 cent dividend this quarter, $7 is probably sustainable. If we don't, the current 10 cent dividend probably supports $5.50. If we get a 15 cent dividend by the end of the year, a price in the $8 to $10 range is supportable. If we get the 18 to 20 cents that the 4Q results suggest is possible given the documented payout ratio, we might see $12.

      The only thing I'm excited about in the current price move is it's sustainability and overall momentum. In some ways I liked the old volatility better.

    • Sme,
      your point is valid, but for those of us that bought at 4 and 5......7 + dividends is looking great.......
      don't forget that the damage was really done 5+ years ago and was only fixed over the past few years. RAS has really only been on an upswings since it was able to retire the old convert and issue new debt.....they only got new money to play with in the past 3 months....

 
RAS
6.50-0.02(-0.31%)May 22 4:04 PMEDT