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Newcastle Investment Corp. Message Board

  • ray858945 ray858945 Mar 22, 2014 4:38 PM Flag

    Future earnings

    I looked through a couple of the NCT presentations again, and, while it's not mentioned, I believe management said during the CC that there was a noticeable one-time hit to earnings this quarter due to expenses related to the spin. I believe they said the divy was affected by that.

    On the other hand, the presentation estimates that the FFO return on the senior housing and on the debt securitizations were both about 16% - 17% currently, and are expected to increase a couple of percent over the next several years. That's without new acquisitions which presumable would add to that.

    In short, I think this is a good stock to hold if you want a reasonable divy which should grow for the next several years anyway. Anyone else see it that way?

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    • ray, I think you summed up the investment case for NCT very well. Wes Edens and Ken Riis have consistently been meeting or exceeding their financial projections for NCT for 3 years running. They seem to be on track with the senior housing biz. IMO, the valuation accorded to NCT by the market doesn't reflect NCT's growth characteristics. As management winds down the legacy CDO biz over the next 3-4 years and redeploys capital into the senior living biz, I expect to see multiple expansion as NCT transforms into a senior living "pure play". So, although NCT sports an outsize dividend, in my mind it's also a growth story with possible multiple expansion down the road.

      Sentiment: Strong Buy

    • It's certainly not for day traders or people looking to get rich quick. It has a nice dividend and some very interesting spin-offs. It's been fun as well as rewarding to own.

      Sentiment: Buy

    • They noted that there was a .04 hit to total earnings related to the spin off. They would have come in at .12 instead of .08 if not for that.

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