Collusion is entirely legal, as long as it's done
in an open and democratic forum such as the Yahoo!
message boards, which are currently being scrutinized by
the SEC for varous permutations of fraud. [This
opinion has been brought to you by the firm of Dewey,
Cheatum, and Howe. Please look us up, Mr. Bells, or better
yet, RUN & HIDE!!]
good point I forgot to highlight. Look at the
sheet. Only about 40% of debt (16% value of ocmpany) is
rate sensitive. Now I admit that Libor plus a weighted
average of about 190 bp is about 40 bp higher than I
think they shout be getting, but it point to the lack
of vulnerability on the expense side to rising rates
(plus libor is short term and thus even less volatile).
Conversly a sustained increase in rates will allow for very
modest room rate hikes > renovation cost hikes. Do I
think that this will lead to higher value for fch, im
not so sure of that. What I am sure of is that this
is not as rate sensitive as many other reits which
hold higher rates of indebtedness and a lower
percentage of fixed rates. All in all, my point is that this
is NOT a rate sensitive stock.If the street treats
it as such, better for all who have a few bucks to
Tigger has hit the nail squarely. FCH is a play
with mid to long potential, and a great portfolio of
properties AND debt at very good rates. If the Fed raises
rates, it adds $2-3/share to the value of FCH.
$27.5 - $30 in Sept. 2000 and thats Y2K compliant..!!!!
Here's what i gleaned from the conference call
1) dividend is very much stable and
not an issue. With payout rate as loww as it is, no
risk of cutting back on that out of necessity and they
still more than meet expenses without having to break
into the till. On the flipside, hey almost scoffed at
the notion of raising the yield to get "the streets
attention" or convince shareholders of their ability to
pay..the CEO said he would if he thought that was the cure
all but given the lack of pricing for the current
yield, doubt it would help.
2) He did not suggest a
cure overnight...very commendible. He felt the issue
would remain one at least a year. (Id personally like
to see a slow exit from dallas...not just 6 hotels
nationwide being sold).
3) No LOSS in revPAR. Flat was
worse case scenario. That means no loss of cash, no
loss of div...just loss of a whopping 35 growth.
downward revision for year of 6%...okay, not happy, but on
the otherhand not bad.
5) No increase in debt
level expected soon.
all in all, this is a
compelling price (coming from a guy who bought a signif
batch at 16 7/8). The company has some local issues
hampering overal growth, as one would expect in such a
boheamuth reit...but still on very stable footing. Very
underextended (making this not at all problematic) with a solid
sheet...even looking out 9 months. The yield is attractive and
secure. I think a buy here will give you 13% yield in a
year and a good chance at price appreciation
conservatively pegged at 15-20% in 12 months. Downside is
minimal here and would indicate further buying opps.
If you want a hotel reit that is sidestepping this,
but offereing a yield of 12%, look at wxh. Of coures
their teh MC is too low to ever get what the company is
worth except under the most golden of circumstances
industry wide, but has good sheet, good managament, good
hotels, y = 12% abd discount at around 25%.
luck to all in your investments. I thik a sell here is
the exact opposite of what is prudent. I think a hit
of 25% is an overreaction. No cure overnight, but a
medium term play with a nice gain in the end for a non
tech stock and very little speculation
(long fch,wxh,ras,wavx,hp ; recently sold icmi,nbr,ibm)
According to the conference call their basis for
2000 predictions is based on industry numbers, not FCH
Neither did they try to pump up any optimism.. certainly
not in Texas where they believe 2000 will be a tough
year also. And exactly when did FCH credibility become
an issue. The first quarter meet their expectations.
The second quarter didn't, and they quided down FFO
when they reported second quarter results.
opinion that FCH is a quality company with excellent
propects and trades at an attractive multiple..and how
about that 13% dividend.
As I posted yesterday I jumped in at 16 7\8 when
it looked like the bulk of selling had been
There is more to be done yet, don't look for a pop up.
We are going to have to have more stock change hands
first. Then we can start to grind
an account with Paine Webber. Litt pulled the
plug on you guys and he's probably the most respected
REIT analyst. Instead of continued speculation about
the reasons for the decline a copy of Litt's report
(probably not prepared yet, but will be shortly) should be
obtained and the highlights posted.
I don't have a
position as I sold out about a year ago but I've followed
this board infrequently for a year. The one theme I
have noticed is that FCH management seems to have
always been overly optimistic about the future. Seems
like it's happenning again...see slowness the next
couple of quarters but next year looks good.
in the world can anybody predict what will happen
with occupency next year? Yes, they obviously have
fairly reliable estimates of the properties they'll have
renovated by then but fill rate and occupency?? And based
on an earlier poster's remarks missing occupancy by
a few percentage points hits FFO hard.
guess is there is a credibility issue with management
right now and you won't see the Litt's of the world
upgrade until they actually see the numbers
Just the opinion of a distant outside and former
FORMERLY known as Reitman.
in the call as previously stated was the slowing of
Revpar growth. 1 point drop in Revpar is 12 cents in
99 FFO will come in 24 cents less than anticipated.
Texas overbuilding is a big problem.
see 3% Revpar growth which could jump FFO 36
A 6 percent drop in Revpar (not going to happen)
would put the dividend at risk.
Stock buyback has
been and will continue to be considered but with major
renovations still ongoing, no real free cash flow for 12
Personal opinion: If this is as bad as it gets (a flat FFO
year) then the public markets have done their job of
flattening out the boom and bust cycle.
Obviously I had
no knowledge of this news and took a big hit today.
Hopefully Reitman and Tonto will ride again!!!
Have you heard the conference call yet. Please
give us your take. Are you still long? You said you
like FCH and MHX. Warning Bells has been right all
along. But he never substantiated basis for his