PRELIMINARY GRADE: No Interest in RAS At this Point
Is RAS a "Super Stock"? NO
Price/Sales Ratio: [FAIL]
The Price/Sales ratio is the most important variable according to this methodology. The prospective company should have a low Price/Sales ratio. RAS's Price/Sales ratio of 1.95 does not pass this criterion.
LONG-TERM EPS GROWTH RATE: [FAIL]
This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. RAS's inflation adjusted EPS growth rate is not available. Hence, this methodology cannot analyze this criterion at the present time.
FREE CASH PER SHARE: [FAIL]
This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. RAS's free cash per share of -2.89 fails this criterion.
THREE YEAR AVERAGE NET PROFIT MARGIN: [FAIL]
This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. RAS's three year net profit margin, which averages -14.08%, does not pass this criterion.
I wish your post wasn't a "total [FAIL]." Joe, if only because its the most conherent thing you've written in a while. Unfortunately:
1 - RAS Price/Sales is currently 1.94. That's near the low end of reasonable. A P/S above 10 would suggest that a stock is over priced. A P/S below 1 would suggest it is underpriced. As things stock, RAS share price could be over 5x what it is right now without triggering alarms based on P/S. More to the point, RAS has one of the lower P/S among MREITs I follow. Your analysis fails.
2 - As don has already noted, GAAP based measures are meaningless when applied to a company that is consolidating two failing securitizations (the Tabernas). AFFO is really the only meaningful measure of earnings right now. That said, my stock screener's variant of Long Term EPS growth rate, "EPS Next 5 Years", awards RAS a higher EPS growth rate, 13.5%/year, than any of the other MREITs I follow. Your analysis fails.
3 - How do you know that RAS doesn't have enough free cash to cover three years of losses, especially since it isn't experiencing losses, and hasn't for several years. RAS has a substantial hoard of cash, however, enough so that its Price/Cash ratio (8.2) falls at the low end of the reasonable range. A P/C under 3 would make it a bargain. A P/C over 50 would suggest that the stock was overpriced. RAS is nearly a bargain on that scale. More to the point, however, RAS already has enough cash that biggerclicker has suggested that a buyback might be in order. My expectation, however, is that RAS will continue to turn its cash into profitable securitized loans. That may well help it to beat its forward EPS estimates. Again, your analysis fails.
4 - Your three year profit margin is, once again, based on GAAP earnings, which is rendered meaningless by the Taberna securitizations. If, by contrast, you use AFFO, RAS has a substantial positive net profit margin. That's a big reason why the dividend has been rising. 13 cents now
My Point Is This Is What Out There , This Is What Other Investors See, Our Board Members Are Mostly Slanted For Ras. As For Me I,m In Ras To MAKE Money Having It Short Or Long, Which I Have Always Said.My [Fail ] Came From One Of 8 Different Analysis measurements. I,ll Post The Outline From The Rest. I Don,t Care What U Think Or Say About Ras. I,m In & Out Of Ras Because That How INVEST!