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NorthStar Realty Finance Corp. Message Board

  • thesteinersnj thesteinersnj Oct 31, 2013 11:55 AM Flag

    Are we deluding ourselves?

    Just picked up another 2500 at 9.32. What more does the market want of NRF management? Are we simply a small choir of self-delusional malcontents, or are we visionaries?

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    • I'm a believer. Really short on free cash right now, but used some divy money to buy another 250 shares at 9.33 today. This is a core holding for me: 41,250 shares.

    • I'm neither. I'm a number cruncher, reading tea leaves via extrapolation. I cannot reasonably estimate how much capital will be raised for the private reits in 2014 but I can reasonably estimate how much more cad will be generated by new loans, net lease properties, the manufactured housing communities and the private equity deals disclosed to date.

      As of now there are about 250 million shares/units outstanding, so each penny per share is about 2.5 million.
      Thus, the margin of error on management fees of 40 or 50 million is 4 cents, not a big deal when estimating 1.40 to 1.60 cad for 2014, which I expect will be reasonably extrapolated from tomorrows estimated 2013 cad.

      I fully expect a 2014 (calendar) minimum dividend of 94 cents, which is nothing but a continuation of a penny per quarter . A 75% payout ratio requires 1.253 cad. A 70% payout requires 1.343. I think we are already there for 2014. We'll all know a lot more tomorrow.

      Nobody has been more critical of NRF's gaap accounting than I, especially for the vies. But it is much harder to fudge cash, which in my book is king. Yeah, Hamo is front loaded on the PE deals, but I'll worry about that in about 4 years when management fees are a much bigger piece of the pie.

      Maybe the shorts just don't believe the growth or transformation is real. I don't know what is driving them.
      I do know the 21 cents they are about to pay is real and I doubt they are going to get anything but hurt from 3Q earnings. I'm standing hard until I see the growth stopping.

 
NRF
17.84-0.07(-0.39%)Nov 24 4:03 PMEST

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