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CommonWealth Reit Message Board

  • lafont lafont Aug 14, 2011 9:58 AM Flag

    Opinions please

    I'd like to solicit the opinions of all the knowledgeable people who post here (you know who you are) on the following 2 to 3 year scenarios:

    Scenario I - The dividend and share price stay pretty much the way they are today

    II- The dividend gets cut 10-20 % and the share price has it already factored in and stays roughly where it is.

    III - The dividend remains essentially intact, and the share price returns to near where it was - $25/26 range.

    IV - The dividend gets cut 25% and the share price retreats 25% from here.

    I'd love to hear from others what they consider the probabilities of each of those scenarios, and certainly any other dividend/share price scenarios anyone considers realistic (with an accompanying probability, of course).

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    • I. 15%
      II. 30%
      III. 40%
      IV. 5%

      V. Dividend gets cut 50%, and who knows what happens to the common price, mostly likely no major move: 10%

      This is a one year time frame. 3 years? At current prices most likely CWH will prove a provident holding.

    • Wow! People are pessimistic! What happens if the economy keeps slowly growing (2.5%+/-) or accelerates faster than most economists are now projecting? If the economy continues with slow to moderate growth, I think there is a 50% chance or greater that the price/sh will reach $25 to $30/sh within next six months and a dividend increase is possible within the next 2 to 3 years. Management is not very shareholder oriented, but is financially conservative (low leverage) and is not stupid. CWH's book value of about $43/sh (per 2nd Qtr Fin., does not include recent share dilution) is reasonable (see my comments on this on 12-31-10, “Is CWH's Book Value too High?, Part 1 & 2 ”) and its $2.00/sh dividend should be sustainable unless economy tanks.

      • 1 Reply to sfruehling1
      • So people think the most relevant question is "Where will the stock price be in 2-3 years????

        As for me-I am more interested in where the market and economy will be in the next 1 month, 3 months and 6 mos. Too many variables to forecast beyond that. But in the meantime I would like to own stocks that have favorable prospects for maintaining (at a minimum) and/or increasing dividends.

        Only fritz and tenn are smart enuf to know where things are going in the next 2-3 years. And you know their track record.

        If you are willing to suffer a 25-50% drop in the dividends and stock price because of the dubious assurances of fake FORTUNE tellers then you deserve to lose your money.

        Good luck. I am now 50% cash due to what I forsee as bad economic conditions and contamination from Europes problems.

        Good luck. Keep hoping.

    • Yes, i would agree all have about an equal chance, but just remember how much things can change over 3 years.
      for the best case its going to take continued low interest rates and management to maintain or slightly improve occupancy. managment seems to be weak in adding value by leasing up the existing portfolio.

      • 1 Reply to nemaha2005
      • Low interest rates seem to be here to stay for a few years,the FED is still trying to inflate our way out of the current mess.
        CWH has to unload another 50 suburban properties,price be dammed.
        Their older suburban and industrial are killing NOI.
        The balance sheet is strong enough to take the hit and the market doesn't seem to care about it anyway
        Sell $500m worth of poor performers for $250m and invest the 250m in CBD properties. Gross NOI would be about the same or better but as a % of income(top line) it would be greatly improved.
        IMO The underperformers aren't going to turn around for a long time

    • All four scenarios have about equal probability over next 2-5 years.