FFO is very predictable as MPW has almost no operating expenses and revenues are off of long term leases. Expenses are well below most other REITs.
No dividend hike while the markets are in turmoil, but no cut likely either.
FFO will be slightly impacted by the sale of $500 million of properties and long term financing for another $600 million or so at about 6%. This appears to be why their guidance was slightly off.
The tenants are doing well. The largest tenant company is down to 19% of revenues and the largest property is only 2% of revenues.
The days of rapid growth are over for now. Trying to get debt to EBITDA down to 5.5, currently at 6.0. This indicates acquisitions will be muted this year and probably next. Despite this, FFO should still increase at low to mid single digit rates over that time.
These guys are smart to hunker down. The market should recognize the stability of their cash flows and low multiple to FFO sometime this year. With long term interest rates declining, a stable 8%+ dividend will become very appealing.
The earnings announcement shows earnings of $0.08 EPS per GAAP and $0.32 adjusted. Bashers on this board have indicated that the $0.24 difference is stock compensation. It's not! There is a chart toward the bottom of the earnings announcement that shows only about $0.04 is stock compensation. About $0.17 is amortization of intangibles and depreciation, a non-cash expense. About $0.10 of that is amortization. Adjusted EPS if you just include just amortization and net income is about $0.18.
The Ghauris made the decision to put their foot on the accelerator with hiring when revenues were falling between products. All I can say is GUTSY. Especially since it worked out.
Yes the whole 3D thing didn't work out. Saying they never planned to take it to market is conjecture at best. Reality is the 3D product no longer matters. This company is getting explosive growth from its new management team, all of whom except Nelson, arrived in the past two years. You need to look at this company as a solar installation company with 100% revenue growth right now.
The contract kicks in during the quarter we are in now. It will be somewhat front loaded as a lot of the fees will be for customization, which is done upfront. Almost all of it falls to the bottom line as the company already has the personnel in place to service the contract. Not sure what happens in the earnings announcement next week, but the one after should be BIG!
Almost forgot the other news. These guys are so busy that they are now keeping their existing property despite the new property doubling their space.
I talked to IR about the stock price today. While anything is just a guess, their theory is that a lot of the investors in SUNW got in for the solar cel product. Now that that is on the back burner they are getting out. If that is the case this thing should charge ahead after the shake out which should end sometime this week. This thing is growing just as fast as Solar City, and does the same thing as Solar City without the longterm lease contract hanging over them. They are also profitable while Solar City is not. They should have a multiple to sales similar to Solar City, if not greater.
A stock buyback makes no sense for a money losing company. It doesn't boost earnings and it shortens the company's life if they can't get profitable. Yes it would drive up the stock, temporarily, but it would go right back down once the stock buyback is done.
The only reason they are not profitable is they are spending 12% of revenues on advertising. That is way above any other retailer I know of. They can cut that in half, be very profitable and still grow.
A few more comments. Stock compensation was cut in half from last year for the last six months.
Non-controlling interests took 50% of the net income last quarter. Most of the non-controlling interests are the Pakistan sub. That sub is probably less than half of revenues, it represents part of Asia including China. The rest of the world is not in that entity. The profit of that sub jumps around and was unusually high last quarter. Over the longer term its take will be a much smaller percent of net income.
At first blush the $4.8 million in sales looks like a big drop from $7.8 million last month. However, January is their slowest month, by far. Sales growth from last year was up 133%, similar to the December growth. The current sales run rate is about $100 million.
All GNW needs to do is meet the $0.21 estimate and we'll be back over $3.00 faster than a prom dress comes off. If they beat, then it's off to the races.
There is not 1.4 million new shares. Those were the shares originally in the note. There was $750,000 on the note left and they were converted to 1.4 million shares as always intended. The only thing that changed was the conversion price, it went down from $1.50 (50% of the $3.00 recent price) to $0.52. Not good, but not much dilution.
Not understanding this price action, the backlog almost doubled and revenues were way above estimates. Strong balance sheet and solidly profitable. Why would you sell?
Only you could bash a company that just had record revenues and a huge increase in net income. And the good news keeps coming. The big contract hasn't really kicked in yet and most of that revenue will fall right to the bottom line.
Yahoo only shows one analyst and they have blown away his estimate each of the past three quarters. The current estimate of breakeven for the next two quarters is way too low. If this analyst is any good the estimate will go up.
Instead of childish taunts, perhaps you can explain why a 1% dilution of he shares supports the short position you have.
The new solar design center is off to a great start. If they can prove this concept, I can see 5-10 more just in California generating $5-10 million a year each. And this is primarily for residential, the smaller part of their business right now.