With revpar down to $87 in December from an average of $120 in all of 2008, the overall drop is 28%. Even though December is a slower month than the second and third quarters, lets just say that revpar averages $87 for all of 2009. That would mean more than a 30% drop in Ffo from 2008 levels of $2.68. Lets call it $1.50 Ffo for 2009. At today's close that is a multiple of 3.4, which is a ridiculously low multiple on what is likely to be trough Ffo.
Someday these guys are going to buy hotels on the cheap with all of that cash, but the stock could still go down alot from here, and the 2009 common dividend is anybody's guess.
I don't know why RAS-C, that was the one with the most attractive yield and price to par on the days I bought. At times NRF-B has been slightly more attractive than the A, for no logical reason; maybe it was just the day and the hour I happened to be buying. Let's see, the NRF-B has the larger float by far, what about RAS-C - nope, it's the smallest of the RAS preferreds. So no correlation there. It's a mystery.
Regarding the yield, RAS is viewed as being more risky than NRF and SHO in terms of liquidity, so it makes sense it's cheaper. I own it because Cohen convinced me that RAS doesn't have liquidity issues in the last call. But because I don't understand RAS's balance sheet very well, I'm not going all in. On NRF-B for example, I am all in, it's by far my largest holding. Safety vs. yield is your call, not mine.
2009 Dividend, if RevPAR is $90 bucks is an easy guess: $0. Unless they sell another property in the year, they'll have no taxable earnings to distribute and will most likely not dividend anything out, which would be the prudent thing to do.
Yeah, I don't care much about the 2009 common dividend, let it be zero. I just want them to hunker down and save costs, keep the places clean and running and wait for the sun to shine again. But this is a stock like AIV, where a combination of the common and the preferred makes for a very effective pair, balancing current yield and appreciation. I'll cash the preferred checks and let the common slide for now.
Every time I sit back and think about securities like these, I just have to shake my head in amazement. Why would anyone screw around with the usual defensive stuff like Wall Mart and J&J, that yield zip and might double in five-ten years? Thank goodness, I guess, otherwise our favorites would have been priced out of sight.
There's a high yield story that started in November and continued with the MLP's in December, that's mostly unknown in the media, and well known to these boards. There's still time, we're jaded after living through this and buying these guys at lower prices, but if I just found out about SHO, RSO, NRF-A/B, etc. I would be in hog heaven, thinking I'd found the bargains of the age.
Can't remember a trading stock quite like this. 20% moves day after day, even during the November insanity. I'll keep light daily trading and looking for the point for buy and hold. Still clueless whether that is $4.50 or ?.
Yeah, it will be interesting to see what happens over the ne xt couple months, it should be pretty easy to project with all the holiday stuff over. Great move for the company to keep the updates coming, everyone should be doing this right now.
The question is, if you want more for a long-term hold (yes), or you want to trade (oh yeah), do you start buying now that it's busted $5? I just don't have a good feel for where this will settle in market dips like this one. I want at least one more position long-term, so I'm going to buy one here. What the heck, $4.86. Tell me I'd regret that around 2012!