Thanks for all the posts ; I own quite a bit of RAS but never really follow what is going on ; I find it rather confusing ; I more understand my other stocks RDN MTG and of course Fannie / Freddie ; I bought in the high 5's about 2 years ago and am not happy with the return ; true the dividends show up in my account every 3 months but still ; I also bought NewCastle about the same time which went up 200% ; I'm getting close to selling RAS
Only Davis thinks earnings were good but he thinks everything about RAS is always great, all the time. I was disappointed. I was expecting higher, in the $.34 range. Schaefer is turning out to be great at overpromising and underdelivering.
Well, if you thought 34 cents, you were more optimistic than I was. I projected 31 cents based on a large projected increase in income (which happened) and the addition of 9.2M shares at the beginning of the quarter. They beat my estimate by a penny. That makes the earnings pretty good in my book, but then I wasn't being unrealistically optimistic. I modeled it out, came up with a reasonably conservative estimate, and let the the chips fall.
And when you consider that all of the per share numbers are based on a 15% increase in the number of shares, these really were good numbers. I though book value and adjusted book value would be down, but they were up. I thought AFFO would match last quarter, but it was up. I did think that income available to the common dividend would be up by a penny, and it was, which makes a 14 cent 3Q dividend more realistic.
But that's just the numbers. The securitization is done and on excellent terms. That's a big win. IRT is headed to market. That's a big win. The application pipeline is over 50% bigger than it was at the 1Q conference call, and they closed most of that queue in 2Q. They timed their conduit sales perfectly, and would up with some more valuable conduit loans in the last three weeks of June.
Frankly, I think Schafer more than delivered in 2Q, and all the analysts on the conference call (all four of them) seem to agree. But its your right to be disappointed if you want to be. All best.
I agree that Davis is always too positive on RAS.
I think you will continue to find disappointment if you think that RAS will give you steady predictable numbers. Your 2 cent disappointment is only $1.4 million off your hopes and dreams bottom line. Had they closed another $22 million in conduit loans they would have hit your number. I'm just pleased that Scott claims they didn't get caught in their musical chairs game with a loss on their conduit loans. This could happen in their future......funding fixed rate long term deals and holding on their balance sheet waiting to sell them into a securitization only to have long term rates SPIKE. Ouch. He says it didn't happen this time, but it's a real possibility going forward.
We will see with Scott. He made it like he didn't want to get too pinned down on numbers, but he revealed that they have $265 million in loans to close in the 3rd quarter (not guaranteed). Further he reconfirmed the cash flow range of 93 cents to 123 cents. Working backwards from the last dividends of 12 and 13 cents......the company has only generated 38.46 cents of free cash flow (65% payout). Unless I misunderstand something they are talking about, they will need to generate 54.53 cents of free cash in the next two quarters. That's a 42% jump. WOW. That's the LOW end of the range. 55.53 cents for the next 6 months would imply a 36 cent dividend for the two quarters combined.....that is a huge jump from where we are today. Davis, feel free to point out if my numbers are wrong. To quote Scott........."we expect our free cash to continue to increase." Well, Scott, it will need to increase a lot to make the numbers you have put into the presentation. High end of the range we get another 54.95 cents in dividends for the remaining 6 months. Scott, please go for the high end of the range....................I like those numbers:-) TIME WILL TELL.
We appear to have some folks are are persistently willing to sell at prices above $7.70. This should be entirely unexpected. RIMA, for instance, has a large inventory of stock bought below $4 and a large inventory of convertible bonds which are break even at about $7.65 and a 13.5 cent dividend. They've been slowly selling off their stock. I presume that are anticipating to bond conversions when the dividend moves to 14 cents per share. It may take a while to work through that, but these results were good enough to carry RAS to higher prices. I'm still looking for $9 by the end of the year.