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JER Investors Trust Inc. Message Board

  • wareham2620 wareham2620 Dec 18, 2008 2:58 PM Flag

    Thje street 12/14/08

    We rate JER INVESTORS TRUST INC (JRT) a SELL. This is driven by multiple weaknesses, which we believe
    should have a greater impact than any strengths, and could make it more difficult for investors to achieve
    positive results compared to most of the stocks we cover. The company's weaknesses can be seen in
    multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally weak
    debt management, disappointing return on equity and weak operating cash flow.
    JER INVESTORS TRUST INC has exprienced a steep decline in earnings per share in the most recent quarter
    in comparison to its performance from the same quarter a year ago. Earnings per share have declined over
    the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, JER
    INVESTORS TRUST INC reported lower earnings of $0.90 versus $1.23 in the prior year. For the next year, the
    market is expecting a contraction of 358.9% in earnings (-$2.33 versus $0.90).
    The company, on the basis of change in net income from the same quarter one year ago, has significantly
    underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs)
    industry. The net income has significantly decreased by 431.1% when compared to the same quarter one year
    ago, falling from $10.52 million to -$34.85 million.
    The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying that there
    is very poor management of debt levels within the company.
    Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This
    is a signal of major weakness within the corporation. Compared to other companies in the Real Estate
    Investment Trusts (REITs) industry and the overall market, JER INVESTORS TRUST INC's return on equity
    significantly trails that of both the industry average and the S&P 500.
    Net operating cash flow has decreased to $9.73 million or 26.41% when compared to the same quarter last
    year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is
    significantly lower.

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