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Alpine Global Premier Propertie Message Board

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  • bluebuick2003 bluebuick2003 Sep 23, 2011 1:09 AM Flag

    message to AWP longs

    so how does everyone feel now ? this is alpine mgmt at its best. they had a choice to invest in US real estate or Intl real estate. guess which one they decided to overweight........the one that goes down the most.

    and what is with the dividend INCREASE in early july. the NAV (XAODX) started the year at 8.39 and never really increased during the year. so that means the dividend was just about right as of june 30 (XAODX at 8.40 equal to NAV on jan 1). but mgmt increased the dividend and then the market tanked. so now they have to reduce the dividend immediately or much of the dividend will simply be return of capital.

    i remember some chatter on the AOD board about mgmt compensation being tied to the level of the dividend. they increase the dividend so their pay goes up.

    there have been much bigger losers this year than the folks at alpine. that is the good news for them. but they just can't do anything to generate returns for investors (bad news).

    i suggest selling AWP and buying RWR and RWX (70% RWR/30% RWX) with the proceeds.

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    • Don't gloat over your call. First, you happened to make your call very close to a market top, so most of AWP's collapsing stock price is due to the market, not to AWP's poor stock picks. Secondly, part of the swoon has to do with people panic-selling and the stock price moving from a 9% discount to NAV to an almost 18% discount to NAV tonite. Panic selling is coincidental with a terrible market and other funds of REIT's I follow like IGR and RNP have also seen their discounts to NAV widen. Third, you make this ridiculous point that Alpine management chose to overweight international real estate. This is an international fund, it's called the Alpine Global Premier Properties Fund, so it's for investors who choose to invest in an international portfolio. Fourth, part of the loss in value is due to some of the huge loss of value in some foreign currencies. Brazil has a 16% weighting in the portfolio and the Brazilian Real has declined by 20% in the last 3 months.

      So, while AWP has been a poor performer you can't blame the management. Also, when the dividend was raised a few months ago management said they were essentially making the year-end special dividend they paid every year as part of the monthly payout. So, it's not a question of them arbitrarily raising the dividend and therefore it's assumed to be unsustainable. It's the same dividend as before, just paid out each month instead of year end. The 5 cent dividend has just been declared for the next 3 months, the announcement made on Sept 20th.

      AWP is steeply undervalued here at a 17.50% discount to NAV and a 12.12% dividend. I added more to my position today. These prices are stupid. I'll continue to buy more at these sublime prices and sell call naked call options on IYR to hedge if the market continues to suck wind. AWP is a gift, and I'll continue to buy more on further declines. I expect AWP to trade back up to $5.50-5.70 in short order.

      • 2 Replies to fxdudeinmia
      • fxdude,

        it sound like you know what you are doing. i'm not too worried about you. is it correct that you would sell AWP once the discount is gone ?

        they haven't made money on the NAV so they will have to cut the dividend. most likely, AWP will trade to a premium before the cut. just like AOD did.

        i'm trying to help out the folks that are going to buy and hold for a long time thinking the income is safe for the long haul. it isn't, no chance of keeping the current payout.

        ps. and sorry if it sounds like i'm gloating. i'm just trying to keep people informed on the performance of the fund versus like investments, not touting my own performance.

      • Very good post. I agree with you.

        May I suggest another hedging strategy?

        If you're selling calls, you do get the premium, but you are exposed to an unlimited loss on you IYR calls (theoretically).

        Also, if the IYR tanks by more than the premium you received for your call, you are completely exposed to all the downside from that point.

        Also, the IYR is domestic REITs and, as you point out, AWP has domestic and international assets.

        you may consider shorting a combination of the URE (2x the IYR) and RWX. I'd throw the RWX in there because, as you have noticed, the international assets have underperformed the IYR, which means that AWP has underperformed the IYR in terms of both the NAV and price as well.

 
AWP
7.33+0.05(+0.69%)Aug 20 4:00 PMEDT

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