The following events are worth noting over the next two months:
1 - There will be a death cross next week, probably on Tuesday. A death cross is a strong technical indicatorr (much as as Golden Cross is) of a change in a stocks price behavior. This cross was likely to happen in September even before RAS price fell below $7.00, but it is all but a certainty now. A death cross usually signals an additional price fall. With that in mind I currently have a standing order in at about $6.00. That said, RAS last Death Cross, which occurred in May of last year, lasted only 88 days, and the lowest price recorded ws only 14 cents lower than the price on the last day of the previous Golden Cross run. From that perspective it is by no means certain that my standing order will hit. Indeed, the Death Cross run lasted 88 days, at the end of which RAS prices was up 37% from the death cross runs's low. The current Golden Cross run, which probably ends Monday, is still up 15% from the end of the last Golden Cross run (and up 58% from the death cross runs low. I expect this death cross run to be shorter than the last one (perhaps less than a month, but two months with an early low above $6 seems like a best guess right now.
2 - RAS will announce its next dividend around September 17. I expect a one cent increase to 14 cents. That should create some upward pressure going into the dividend announcement on on into the dividends early October ex-div.
3 - The market is used to Congress threatening to shut down the government, so the effects of the mid-October threat may be modest, but it is a threat to the overall markets going forward. That will create downwrd pressure though mid-October and the beginning of 3Q reporting.
4 - That said, I expect financials will be showing good numbers for 3Q, and that should create upward price pressure just as the shutdown threat starts to go away.
5 - RAS will report its 3Q results around the end of October. Results should be good.
That's pretty much it for this coming events thread. EVerything projected has happened.
1 - RAS is still up up $1.06 a share (over 17%) from its close on the day I started this thread.
2- The biggest factor in that increase is, as expected, the 2 cent increase in RAS dividend, which is now 15 cents
3 - The shutdown has happened, but market reaction was muted overall. The market has seen this before. Eric Cantor, who had a portoflio position that was betting against government bonds, must be disappointed.
4/5 - RAS presentation at the JMP conference did nothing to reduce expectations for RAS 3Q numbers. Now we know why. RAS had strong 3Q numbers. AFFO is up to 33 cents. Operating income jumped 20%. That bodes well for a 4Q dividend increase to somewhere in the 16 to 18 range (18 cents would make the 10% increase in operating earnings.
6/7 - Ex-div has passed. Trading has mostly been within the 15 cent dividend window (despite the government shutdown). .The dividend was paid today (doesn't hurt my portfolio any) and now the price is back up.
8 - The next preferred dividend should be announced on Tuesday. IRT had previously announced continuation of its dividend.
9 - IRT announced two multi-property acquisitions before the 3Q results came out.
RAS has tended, over the last few years, to rise from its 3Q results going into the end of the year. That should happen again this year, especially given the relatively mild rise into 3Q earnings. That said, RAS doesn't usually make make many announcements in November. The next solidly predictable bit of news will be the 4Q dividend announcement in mid-December. Some other things can be predicted too, but that's fodder for another thread. Unless somebody else posts here, this thread is done.
Roughly seven weeks have passed since I made the initial post in this thread. Where do things stand since:
1 - RAS is still up up 75 cents a share since the death cross in early September. Sometimes technicals are completely meaningless..
2/6/7 - The 2 cent increase in that has driven the gain went ex-div and will be paid in about a week. That payment will increase the dividends per share RAS has paid since resuming its dividend to $1.02. Not bad for a stock that traded for a little as $2.90 over the same interval (and that closed at $7.17 yesterday).
3 - Market reaction to the government shutdown created some bargains, but the reaction was pretty muted and the market has been up sharply since.
4/5 - The RAS presentation at the JMP conference provided continuing evidence that RAS should have a strong 3Q. Results are scheduled to be reported inside the project date range, on October 31 (just a week from today). The date was announced inside the expect time frame as well (October 16)
8a - IRT announced its fourth quarter dividends well ahead of the expected dates. It will continue its monthly dividend of 5.333 cent per share.
8b - The next RAS preferred dividend should be announced sometime in the next four business days.
9 - As expected, IRT announced another property acquisition in advance of its 3Q results (which will be reported November 1). This one is huge, a $65 million deal involving four properties. The two acquisitions it has announced so far nearly double the asset value of IRT and should lead to a nice bump in earnings.
There has been other, less predictable, news along the way, but the last seven weeks have developed pretty much the way I expected them too.
Looking forward to seeing the 3Q results next week.
Yes. In fact I don't think RAS would have taken the dividend to 15 cents 3Q if they didn't see another increase in 4Q. They would have gone to 14 cents.
More to the point, I think they are taking the comments from 3Q last year seriously. If they come in at the low end of their 2Q estimates for revenue we should see a 17 cent dividend in 4Q (for a total of 57 cents in 2013 dividends). If earnings are better than that the dividend could go higher. I don't think they'll pay a regular dividend that they don't feel is sustainable long term, so some portion of any payout above, say, 18 or 20 cents is likely to show up as a special.
Time to check in again on the passing flow of events:
Checking in on our progress through these events.
1 - RAS is still up up about 60 cents a share since the death cross a month ago. Not surprising..
2- The biggest factor in that is the 2 cent increase in the dividend to 15 cents
3 - The shutdown has happened, but market reaction has been pretty muted so far. As I suggested, the market has seen this before.
4/5 - RAS presentation at the JMP conference did nothing to reduce expectations for RAS 3Q numbers. They should be pretty strong. I'm looking for 3Q results reporting between October 22 and October 31 with an announcement of the reporting date somewhere between October 8 and 17.
6/7 - Ex-div has passed. Trading has mostly been within the 15 cent dividend window (despite the government shutdown). .The dividend still gets paid at the end of the month.
Some additional dates to look for.
8 - The next preferred dividend should be announced in mid-to-late October. IRT should announce its fourth quarter dividends in the same time frame.
9 - Expect IRT to announce another property acquisition before the 3Q results come out.
Tomorrow is ex-div. One would normally expect RAS' price to climb into ex-div (especially with a two cent dividend increase. That hasn't happened, largely because we have been slowly backing into a government shutdown that the market is clearly pretty unhappy about. A large majority of American citizens are pretty unhappy about that too, but it has had lots of cheerleaders on this board, including folks who are simply hoping for bargains (yankee) and folks who are simply partisan on the non-issues that are bringing the prospect of a shutdown to a head.
Bottom line, it appears increasingly likely that there will be a double hit on RAS price tomorrow, with the government shutdown amplifying the ex-div effect. None of that may happen. The House of Representatives may come to its senses (unlikely). The lack of a rise into ex-div may help to protect RAS price at $7 (which has certainly been the case so far today). I have significant profits from my last two RAS buys, so I've sold some in anticipation of ex-div. If RAS' price goes up, I'll put the money to work elsewhere (I still have a large position in RAS and will collect a large dividend). If there are bargains, I'll put the money back into RAS.
AS for the govenment shutdown, it's a waste of everybody's time that will help no-one. Open enrollment under the Affordable Care Act starts tomorrow too,, and since its a private insurance system, a government shutdown won't affect its initial rollout.
Checking in on our progress through these events.
1 - The death cross is in. RAS is up about 70 cents a share since then.
2- The dividend is in with an unexpected 15% increase to 15 cents, which is why RAS is up more than 10% since the death cross.
3 - The house basically caved on the government shutdown by passing a continuing funding bill. There's a lot of contrary noise, but the market's reaction has been pretty muted so far. There could still be a shutdown, but the market has seen this before. Those hoping for sharp declines may be disappointed.
4/5 - The size of the dividend increase suggests that RAS 3Q numbers (out in a little over a month) will be even better than expected. That probably bodes well for financials, which should start reporting around the time Congress raises the debt limit.
6/7 - Ex-div is still October. RAS should move up between now and then and may move down after. The dividend will still be paid on October 31, which is probably pretty close to the date that RAS will report earnings.
The second of the coming events, the dividend announcement, is now in, and its a bombshell increase in the dividend to 15 cents a share (15%). Orhwe events are still pending, but some new antiicipated events can be added to the list, including
6 - Ex-div on October 1.
7 - A dividend payment on October 31
My expectations for the 3rd Quarter results, moreover, are only strengthened by the early dividend announcement and increase, but the next obstacle to the market remains Congress.
So the inevitable happened. RAS had its death cross today. Interestingly, however, RAS closed up for the third straight day. That's an unusual combination. RAS has had its 200 day rise above its 50 day SMA about a dozen times over the last fifteen years and has never risen into a death cross (at least not three days running). Technicals are a black art in any case, but if there is a dividend increase a couple of weeks from now, this could be a relatively short lived cross.
In any case, this event is in the rear view mirror now. If there isn't an announcement before it happens, I would guess that the next event will be the divdend announcement, probably during the week of the 16th.
RAS closed up 8 cents today. That would enough to defer the death cross to Wednesday (at least by my calculations), but the 50 day SMA and 200 day SMA are almost even right now and RAS would need a 72 cent gain (unlikely) to avoid the cross tomorrow.
That said, RAS continues to show strong support at roughly $6.20, where it has an 8.4% yield. It remains unclear whether my order at around $6 will hit, and I won't worry about it if doesn't.