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RAIT Financial Trust Message Board

  • davisfoulger davisfoulger Jun 21, 2013 5:14 PM Flag

    Institutional Investment up to 55%

    Well, it usually takes awhile, but the first quarter institutional ownership numbers are in, and there's a lot of good news, starting with an increase in RAS institutional holdings to 55% of the common.

    I should start, however, with some news that some folks will regard as bad news. RIMA Senvest has been reducing its stake in RAS. This doesn't surprise me. I indicated back in February that I thought RimA would start taking provfits on its RAS investment as soon as the price crossed $7.60 went over 13 cents, and perhaps sooner than that. Selling shares makes sense for them at levels. First, they have to have doubled the value of their investment in shares from their average price, which was under $3.75 back then. Second, they needed to create room to convert their convertible note holdings (much of which was bought at discount) into shares. It appears that, as of March 31, they had done both, reducing their convertible note holdings from an aggregate value of $23.5 Million to about $14.5 Million and reducing their common share holdings from 3.5M shares to 2.4M shares.

    Now for the considerable good news:

    1 - The institutional position in RAS is way up, to 55% of the float. I expect the institutional ownership position will increase as RAS dividend and price rises. I imagine that's why RAiT's session at NAREIT was so well attended. It's on a lot of insitutional investors radar right now.

    2 - The number of institutional investors in RAS is up sharply, from about 100 at the end of 2012 to over 140 at the end of 1Q. There were 37 new institutional investors in 1Q.

    3 - Institutions increasing positions outpaced institutions decreasing positions by over 2 to one, with 86 institutions increasing their positions and 37 decrreasing their positions.

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    • The most important part of this is the increase in the number of institutional holders.

    • Certainly great news for RAS!
      Not surprising that RIMA is lightening up. Beyond their limits on converting their bond holdings, they seemed more like quick buck artists than long term traditional investors...........regardless they regonized a great opportunity and took advantage. Further they have owned over one year, so they get capital gains treatment, if that means anything to their investors.

      • 1 Reply to ethison
      • RIMA are value investors ... period. Any time you make a pick that's up more than double for you, you lighten up and look around for other value opportunities.

        That said, they aren't quick buck artists. It has taken several years of investment in RAS for them to get the big numbers,, and now their average price is giving them huge effective yields on what remains. I expect they'll have a large position in RAS for at least another year or two.

 
RAS
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