SOHO had so much great news in 2013 that it is hard to keep track of. Here is my summary:
1-1: Began the year trading at $3.32
1-22: Increased dividend by 16.7%
3-28: Amended Raleigh Doubletree loan to take out $2.1M at 5.25% and used it to pay down their 12% preferred.
7-24: Increased dividend by 14.3%
8-5: Refinanced $10M 5.25% Raleigh Doubletree loan for $15.6M at 4.78%. Used $2.7M of the proceeds to pay down 12% preferred.
9-30: Issues $27.6M unsecured debt at 8%. Uses $11M to retire all of the remaining 12% preferred.
10-22: Increased dividend by 12.5%
10-24: Uses $3.2M for warrant redemption of 900,000 shares. Similar to a large stock buyback, dramatically reduces future dilution.
11-14: Purchase of Crowne Plaza Downtown Houston. An accretive acquisition of a high quality asset with Revpar of $96.80. Uses a $21.5M loan, approximately $9M in cash, and limited partnership units for the purchase.
12-27: Redeemed remaining 1,000,000 warrant shares for $3.975M, further reducing dilution.
12-30: $57M refinancing of their JV Crowne Plaza Hollywood Florida hotel. Used $3.5M of their proceeds to extinguish debt on their balance sheet. I calculate that they retained an additional $2.5M.
12-31: Closed the year trading at $5.94. The stock increased 79% for the year! (not including dividends)
They have set themselves up for solid FFO improvements in 2014, and they have promised more dividend increases. The stock remains way undervalued at these prices.
I think I will wait until fourth quarter earnings come out before I make projections for 2014. SOHO has had a lot of changes lately and I want to see the latest FFO figures, listen to the conference call, and see the impact of their acquisitions. At that time I will also compare their valuation with that of some other reits by looking at 2014 FFO projections.