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Sunstone Hotel Investors Inc. Message Board

  • peacecorps03 peacecorps03 Mar 2, 2009 6:07 PM Flag

    Did not buy today

    A bit too close to my last buy of 2.22.

    Added some energy stocks today - pwe and vlo.

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    • PWE was a very good buy today.

    • My last buy was 2.33, so I did pick up some. I theorize that the company must be buying as much stock as they can right now. I don't know how that works, whether they have a staffer at a terminal with a Scottrade account loaded with cash, or whether they work through the system somehow, but you would think down this low they would be meeting any ask that pops up, and there was evidence for that this afternoon. My theory therefore would hold we won't see it below $2 much or for very long, because the company would be meeting every ask up to that point, and would re-set the price until the asks went above whatever price they set, which might be $2. Just a theory, but why would let an ask go by at this price? Wouldn't make sense.

      I bought SHO-A today, and I bought something interesting, CYRV (otc). It's a zombie hybrid REIT holding nothing but match funded toxicity and 3 buildings leased to JPM for the next 12-13 years. It has one small debt to payoff, but cash flow is way above the 10 cents per quarter they are paying as a dividend, and there appear to be no other liquidity issues at all. There's execution risk, in that the toxic stuff could just vanish, but aside from horrific write downs, cash flow has been holding up. The building cash flow is not at risk of course, unless JPM goes down. 40 cents a year on a 90 cent purchase is . . . gross. And unlike other REIT's they are apparently committed to the 10 cents.

      It's a pretty sad entity now, no employees, just a file cabinet full of paper, and all the q&a were from individual investors! But it looks like a very low risk buy. I wouldn't really classify it as speculative, not having any real liquidity risk. Unusual, but not very dangerous.

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