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Sun Communities Inc. Message Board

  • garfroggy garfroggy Jan 8, 2008 6:46 PM Flag

    SUI at crazy valuation

    guided for 2008 $2.77-2.82 ffo so lets take $2.79

    $2.79 18.3 mil shares outstanding or $51.06 mil in income after payment of interest expense and General Administrative expenses.

    Dividend yield is over 13%. this is crazy valuation and would expect buyout firms or re cos to take a look at this stock.
    this is not a bank or mtg company that wrote bad loans. this is insane.

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    • thanks for optimistic post but many reits jumped have jumped 10-20% in last few days. This thing sits here by do nothing mgt. the stock should of bounced to low - mid $20's like most of the rest.
      it is going to take more than just sitting on one's @ss to get this stock up in value.
      why not just sell it to highest bidder?

    • With easy debt and very slowly increasing FFO covering the dividend (barely), it should be just a matter of time before "the market" discovers this sleepy dog. Don't offhand know how much is owned by mgmt, but they appear to be an extremely status-quo bunch. So best to enjoy the outsize dividend until real estate is back in favor on Wall Street. A short squeeze would be a bonus.

    • Note, management guidance has several assumptions so it isn't written in blood. To me the shakiest involves their cost of credit at a little over 6%- don't know if this will hold in a real credit crunch- shorts in the reits think they will have refinancing problems. Still this one is valued so low, I think estimates can come down some and this still be a good buy.S&P estimate is less at FFO 2.68 which allows for some errors but would still support a much higher share price. Even a small distribution cut would still make it a good income vehicle in normalized times. Used to tradeover thiry with an 8% yield.Think this will be at least an ok buy.. Good Luck

      • 1 Reply to wilsonrusty2
      • what refianncing?

        "The Company's annual debt maturities range from $14 million to $30 million over the next three years."
        from recent press release.

        also credit lines are based on libor. last looked libor rates have trended down big vs last year.
        Libor rate 4.41% Today vs last year 5.32%. This is a fall of 0.91% or 17% lower than last year.
        Uninformed short in this one.
        shorts better plan their exit strategy. low float and new institutional holders are not selling after buying down here.good luck shorties. it may just rise as fast as it fell.
        the segment that normally buy or lease mfg houses will be coming back to papa here. gone are the days of buying a regular house with a pulse lending.

    • Added more between 17.70 and 17.78 Locked in solid 14% plus yield. This hit a new 52 week low so it will probably keep going for a while. Light volume but you can see the shorts can knock this down with little effort as there is little buying interest. Time to dig in and hold and see how long the shorts want to pay these dividends. This is a time when the market is ignoring yields and focusing on cash and panic. Fed needs to get with the program. Good Luck. RRW

      • 1 Reply to wilsonrusty2
      • This stock will keep dropping until SUN gets starts actively managing its company. I started buying at multi year lows 7 points ago. The powerful short seller doesnt care about paying the dividend when its knocking the stock down over 50%, 14% dividend is nothing in comparison especially since they will only pay dividends for a a few quarters before they close out the position. SUN management is obviously lazy and the short will ride this as long as the stock action stays the way it has the last 45 days. I got in this stock for safety and to ride out the market volatility and am getting my ass kicked. Silly news flashes from SUN is not the answer, they have to get busy with Wall Street. Wouldnt be surprised if a hedge fund is shorting, then gobbles up the company.

    • Well I just made my first buy in this stock this morning and will share my research if anyone cares. Many of the analysts have sell or strong sells on this. A bunch have holds and a couple of brave souls are recommending purchase. I think the negative sentiment is why we have a good sized short posistion in the stock. SUI is after all into housing and has not had stellar results recently; it finances are weak compared with many other reits.

      However based on management' recent guidance and trends I tend to agree with S&P's (hold) evaluation. They feel SUI is beginning to emerge from a long down turn. They feel the new emphasis on credit quality is beginnig to bear fruit. They project FFO in the same range as management and have a target price of 27 based on a valuation of 10.2X FFO.

      The present single digit metric seems a buying op to me. Anyway if they can sustain the payout, which I believe they can, this yield is going to look sensational after some agressive Fed cutting. The present price is kind of a worst case valuation IMHO so any further downside appears limited if I am wrong. Good Luck RRW

      • 1 Reply to wilsonrusty2
      • Sun Communities sees '08 FFO of $2.76-$2.82/shr

        this is the guidance so 10.2 times ffo or $2.79 a share is about $28.50.

        why does eqr who is residential apartment reit trade at over 14 times ffo and this one only deserves 6.43 times?
        This should get at a min 10 times probably 12.
        10 -12 times ffo $28.50 - $33.48.

        this stock even after affo numbers of about $2.42 should trade at 12 times affo or $29.04 a share.

        this stock been knocked done by uniformed short sellers. mfg housing and apartments are consistent investments not cyclical like housing as the population grows more housing needed.even in slow times people have to live some where an cheap housing is required. the mother of all short squeezes is coming. not alot of float out there.

    • There is a conitinued increasing short position in this stock, last I checked it was at 1,600,000 shares. I agree with the crazy valuation but I bought at what I thought was gonna be the lowest price at 24 and now we are below 18 today. Seems that SUI Mgt. would protect the stock price and be more proactive with Wall Street. I would love to take over this company at $18.00

      • 2 Replies to rrfootball2003
      • It looks like the short seller cannot knock down the stock anymore.Sorry Charlie.
        It looks like institutions have finally stepped in
        and now with you say 1.6 mil short good luck to them covering the shares.
        How far will it rise?
        Hopefully back up to high $20's based on some valuation rationality.

      • been very surpirsed by the low share price.It seems unreal when you see 13%
        The Mgt responses have been very disappointing compared to the fall in price....should be more proactive finding big investors to step in to buy or hiring an investment banker to explore strategic alternatives due to the ridiculously low stock price in the market.
        Liked your hire an industry mfg home sales rep to boost sales. it seems they do not have a real sales plan to boost occupancy. why would a realtor know the mfg home business?
        Find a few sales people who know how to sell mfg houses. let them have a nice chunk of markup to incentive them but of course keep them on a short leash.

    • just looking at a few other beaten down reits
      came across EQR.
      FFO $2.33 and share price $33
      14 times ffo

      SUI FFO $2.79 and share price $18.55
      6.65 times ffo
      if sui gets only a 10 times ffo we are talking about $28.

      on an adjusted ffo price take 12 times is should be Close to $29

      seems absurd being that both house people with similar income levels .

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