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.
Bob, it all depends on tax law. Sometimes the companies can structure it as a "deferred" tax event(I am not using normal tax terminology here). Sometimes not. With NCT, since NCT distributed NRZ stock (other wise known as property) which has a passive business, I do not believe there was a way to do it without the current taxation. Your Litton deal you mentioned above sounds more like a tax free acquisition. You had Litton stock which you exchanged for Northrup stock. In other words, two companies came together to continue their business as basically one. Here we have a company that economically made a distribution of another. Whether its cash or property, its a distribution. If it doesn't meet the exception, its taxable. If the tax law doesn't do this, it would leave a wide loop hole to distribute earnings and profits to shareholders without much tax implications.
You need to allocate the return of capital to the share that it was received from.
You lumped alot of things together! So, your original cost basis in NCT is 10.77. NCT distributes NRZ which was worth $6.89. This $6.89 distribution is made up of a return of capital of 4.55 and a ordinary dividend of $2.34. If they did it correct, your dividend of $20K is from the $2.34 per NCT share where you recieved NRZ shares, .17 from NCT's other dividend distibutions, and .45 from NRZ. Since you received NRZ, which is property and has a value, you should have expected to pay taxes on this ($2.34). Your massive loss carryovers are capital loss carryovers which you cannot net against dividend income. You can always sell some shares (NRZ, NCT, or NEWM) to pay the tax.