A couple things to keep in mind. Incorrect 1099's do not determine the tax treatment of transactions. When you recieve an incorrect 1099, you are still responsible for reporting correctly. What you do is you include the amount reported from the 1099 with an adjustment to get to the correct amount and an explanation.
"Investing in NRZ is an income play" I view it as a little more than that. I look at it as also a value play. My projection is that it will pay dividends of at least $.75 in 2014. At todays price that is a return of 11.54%. Once the market realizes that the income stream from MSR's are pretty steady and predictable over a large number of loans, the return should go down. Given my guestimate of 2014 dividends, I see this thing going to over $9.00.
Thanks for your take. It really does add to this discussion on the board. Prior press conferences with management has shown that the rate of loans refinanced and loss to NRZ was below projections. This seems to correlate to your personal experience.
Why are you brining this up again? We have discussed this many times. Just use the company press release about the spin off and its taxability. Scottrade is obviously incorrect. Scottrade does not determine the taxability of the spin off. The company does!
Here is my guess subjec to change once additional information is released. Merrill Lynch did its due diligence on the deal by having the winning bid. It finances 75% and keeps 25%. My guess is that the 75% financed is secured with those same assets or maybe not. So, why does Merrill do this? Merrill gets a very secure interest stream of income since NRZ has other income to use. These are subordinate tranches so this makes the income more secure.
Once they declare a dividend, and possibly an increase, my opinion is that $6.00 won't be seen unless in the future there is some unforseeable event.
If you can buy it at a deep enough of a discount, you can make money! I am not too worried about the golf courses as they typically entail alot of land. Some of this land is probably pretty valuable. If the appeal of golf diminishes or other uses have greater demand, then the land is available. Besides at such a discount, its only a matter of imagination as to how to unlock the value.
Acquisition costs 8M, revenues of 12.5 with a return before depreciation and amortization of about 20%. 2.5/8 = 31.25% return before non-cash expenses! Wish I could personnally find some of these deals! LOL
Well, he seemed to have combined parts of two separate transactions. In any case, both transactions were within a month of each other and its not farfetched to believe that part of the proceeds from the shares also went to the spin-off.
50 million shares on Nov. 19, 2013 for the acquisition of the Holiday assets. 1 billion in assets were acquired using proceeds from sale of shares plus some debt.
Nervous nellies! Lots of untrusting investors out there! NCT is becoming more predictable as it transitions into a senior living REIT. In rethinking the 1st quarter dividend, I do not believe that they will announce that tomorrow, but they just might give some guidance since it is two months after the acquisition. Rents are paid at the beginning of the month and interest is at the end. They should have a very good idea as to what the dividend will be.
I should not speak before I do the research. The acquisition was 12/23/13 so any cash flow effects will not be felt until 1st qtr. 2014. So, you may be right and there might some pressure on the dividends. But my take is that FIG is pretty smart and will just hold the divi's the same with a nice projection to go with it.
There might be some cash costs for the spin-off that could impact the dividend. But I doubt it would cause a decrease.
I don't remember any dilution prior to the distribution of NEWM. Can you remind me of that?
There was a billion dollar acqusition of assisted living facilities in the 4th quarter with fixed debt. Why wouldn't that boost cash flow and possibly dividends?
Not that I know anything. But it seems to me that FIG is aggressive in growing their businesses. Maybe there is an acquisition in the works.
Based on the dates, they correlate to the dividend payment dates of NRZ. 7/31 distribution of .07. Of that amount, .006991 is a capital gain. Just go through each distribution.
After NRZ is distributed, it is a completely separate corporation free to distributed dividends like any other corporation. It did.
Since you stated that your original cost basis in NCT was $10.77, we subtract the return of capital from that of $4.55. Assuming that there has been no other return of capital (NEWM: we don't know what that is until the end of 2014), it is 6.22. NRZ is $6.89 assuming that no 2014 dividends is a ROC and, at this time, I doubt it.
The drop in value of NCT is similar to the drop when there is a dividend distribution. Its market based, not really an economic loss since you continue to hold NCT. Not sure what you are refering to when you say "pay tax on NRZ's capital gain". What NRZ capital gain are you talking about?
The distribution of NRZ is only taxable with regards to the portion that is a dividend, $2.34. With regards to the portion that is a return of capital, $4.55, only to the extent that it exceeds your basis in NCT. Hope this helps.