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Resource Capital Corp. Message Board

  • exdivy exdivy Aug 1, 2010 4:30 PM Flag

    Follow-on offerings and Earnings:

    Offerings:

    The follow-on offerings were good for RSO and good for investors (that's why RSO did them). Why some people fail to see that is beyond me.

    Earnings:

    Last Quarter:

    The company paid the dividend out of NOI with a penny left over. That means this quarter (all else being equal) they could pay the dividend out of NOI for all of the "old" shares with a penny left over.

    Take the penny and multiply by 40 million shares: That gives RSO $400,000 for the 8 million new shares or $.05 a share for the dividend for the new shares.

    The CEO said RSO had enough cash on hand to "add between $0.12 and $0.22 a share" to NOI. That alone could take care of the dividend for the "new" shares, and that is without doing anything with the money they received from the offering.

    This Quarter:

    The CEO has already said the dividend is on track at $0.25 through the rest of the year. What is it people do not understand?

    Of course, there is the $40 million they got from the follow-on offering, and that should help along with the $20 million they probably just got through the DRIP.

    The earnings report should be just fine and followed by an upgrade.

    As I said a while back, I expect to see $6.77 on Tuesday - $7 by August 5th.

    GLTA

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    • ExDivy, you are right about RSO, it does have solid earnings and a bright future. It's just this earnings report that has my attention. I simply suspect that because of the dilution, earnings for Q2 may not be what everyone expects. Q3 is a different story. I know it but, is everybody else ready for it. I fully expect Q3 to be about $0.30, maybe better. By the way, that big move will come too. You are not wasting your time. GLTU.

    • I have heard this before seems like this spring when we made a run to the mid $7's.
      I thought you said we would be over $8 by now and I could take that to the bank!

      Great job by the way.

      Lets put it this way RSO had better make a run like this soon or you are passing up a lot of other opportunities while trying to hang in here on RSO for the big move.

      Seems to me if you are following your own advice about never loosing money on RSO that you have been stopped out many times for many small losses that should have just about wiped out all of your gains since we hit the mid $7 range. All the trades since then should have you near net neutral.

      • 1 Reply to momenttrader
      • Momo,

        True, I am a big proponent of RSO. I hold it long term in ROTH accounts:

        In the past year, the stock has more than doubled, is rising going into earnings, has paid 40% in dividends, and management has provided good visibility along the way.

        You can run your foolish mouth all you want, but I think a gain of 140% is not hurting anyone on this board who is long the stock.

        I also trade RSO in my leverage accounts and would never be satisfied with a gain of 140% for an entire year. Indeed, trading RSO has provided me much higher gains.

        As for the present, we are getting a HUGE 17% dividend, and it is that dividend that will drive the price of this stock higher.

        If I said we were going to $8, well I think $7.55 is pretty close considering at that point they announced a follow-on offering and sold stock at discount. I am not disappointed in the least. If you are disappointed in my posts, please do not read them.

        Here, go back and read this post and try to explain your childish claims:

        http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_R/threadview?bn=27991&tid=10189&mid=10189

 
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