BTW, you are not alone with Scottrade, Ameritrade still has 100% of my cost basis allocated to nsam and none to nrf. However, ameritrade is better than Scottrade because my aggregate basis is still the same as pre-transactions.
When Scottrade finally gets it right, aggregate cost basis post spin must equal aggregate basis pre spin. The reverse split does not change aggregate basis and neither does the spinout.
When they get it right NSAM basis + NRF basis = 94,196 or thereabouts. The thereabouts is because cash will be issued for fractions resulting from the reverse split. So your 94,196 will decrease by the basis allocated to the fractions sold.
First, management fee income does not count as income from real estate for purposes of qualifying as a reit.
Unless management were held by nrf in a taxable reit subsidiary, it would not have been too long a time when the management fee gross income would have disqualified nrf as a reit. So the management business had to be held in a taxable entity (taxable as a C corporation) as soon as it got big enough to disqualify nrf as a reit.
It's really not an extra cost, but as a taxable reit subsidiary, the tax would have been buried inside nrf consolidated. As an independent company, nsam is taxed as a C corporation, but now you see it as a line item in the income statement. The upside is the dividend will qualify for lower tax rates on "qualified dividends"......zero tax to the extent it would have been taxed at 10% or 15%, 15% if it otherwise would have been taxed at 25% or 33%, 20% if agi exceeds certain limits with an extra 3.8% Obama tax if agi exceeds 200/250 joint. Even at the max, 23.8% is a lot better than 43.4% (39.6 + 3.8) maximum rate on ordinary income.
Also the minimum 148 million per year sweetheart fee from nrf to nsam means it is more likely that the nrf dividend will be return of capital which is not immediately taxable, but which reduces the tax basis of the stock. If roc dividends exceed tax basis, the excess is a long term capital gain, also taxed at favorable rates if not offset by capital losses.
The sweetener is the higher multiple on nsam's after tax cad.
Try giving the basis for your opinion, including the specific numbers you are relying upon, and maybe you won't get so many thumbs down.
You might also tell us why nsam has to retain earnings to grow, absent an acquisition.
The guy who washes down a hospital's operating room and sterilizes the instruments has "somewhat of a medical background". Ask him about the pains in your chest.
Well, well, Fidelity finally shows NRF as htb with 11.1 million shares available and an interest charge of .75%.
When I called quite a while ago to ask why, with so many shares available, is NRF htb, the answer was shares in cash accounts (meaning Fidelity has to ask permission to lend, and answer is "what's in it for me?")
NRF is not a mreit. Even when it was, it was commercial mortgages, not agency debt like agnc and nly.
Comparisons between the two types is not appropriate, imo.
The dividend in August will be exactly 50 cents because nrf will pay the whole dividend for 2Q. NSAM will pay none in Aug. Thereafter, beginning in Nov, nrf will pay 35 or 36 cents and nsam will pay 15 or 14 cents. Combined, the dividend will total 50 cents, but it ain't all coming from nrf.
NRF 50 cents in Aug is a bonus compared to the couple of years growth needed to get nrf without the nsam cad to get back to 50 cents. Hamo thinks the yield on post-spin nrf should be about 6%.
36 x 4 = 1.44 / 6% = 24.00 price
6.5% = 22.15
7.0% = 20.57
7.5% = 19.20
Hamo will not tolerate more than 7.5% without another spinoff. Won't happen soon, but you will hear it at the CCs very soon. IMO, nrf is a mostly equity reit table pounding buy with an ongoing yield of over 8% (1.44/ 17 = 8.47%).
50 cents in Aug is a bonus, 50 x 4 = 2.00 / 17 = 11.76% annualized yield.
Why are you folks wasting time combining the earnings when what is being presented is the first 12 months of independent operation????
Using midpoints, nsam = 33 cents x 395 million shares = 130.35 million of bottom line cad.
Nrf midpoint = .82 x 395 million fully diluted common shares = 323.90 aggregate cad for common.
Add the two together, 130.35 + 323.90 = 454.25 million combined cad for common. So what? It's like adding MO and PM's (a spinoff from MO) net income together and proclaiming the total as if it means something. It doesn't.
What too many of you can't understand is that 395 million weighted average diluted shares is now 197.5 million each due to the 1 for 2 reverse split.
So let's walk through it again, ......practice, practice, practice is the way to learn those terribly difficult concepts.
Post reverse, post spin, lo and behold, nrf's projected aggregate cad for common is STILL 323.9 million. Imagine that. The number of shares was cut in half but the projected cad stayed the same. Wonders never cease despite the lack of rudimentary understanding. Now, let's do the division together. 323.9 million divided by 197.5 million =....Gimmee a drum roll......1.64 new midpoint cad. WOW!!! that's great.
You all who still don't get it can practice the above with the nsam numbers, if you can identify them. Keep doing it until you get 66 cents for nsam midpoint all by yourself.
Of course, anybody who understands the relationships between and among aggregate cad for common, shares outstanding and eps would simply multiply 82 cents x 2 = 1.64. But, if you have to do it the long way to understand it, try, try, try again.
Oh, I recommend stocks. I just won't give specific investment advice to any individual unless I know their financial situation inside and out, which is impossible on a message board. Without a full boat of facts, what may be great advice for A may be terrible advice for B.
I'll tell you what I do NOT own.......retail, social media, tech (or any company) that I don't understand. I'm big in reits because it is a hard asset, without the risks of retail where you never know what their sales or margins will be. I own SCCO and will probably die with it as long as there is no better mousetrap for copper. I own KMP and ETP because I think renting pipelines is safer than, say, drilling (plus the tax sheltered cash flow. I own some big pharms. PM+MO for the dividend, JPM for banks...and lots of others for diversification. I'll probably also die with SUI as I view it as an annuity (partially tax sheltered) which has a chance to increase with inflation.
And of course, I have a ton of nrf/nsam. NSAM is largest in my portfolio followed by nrf followed by SUI. Flipping the volatility is fun for me and the core....well, until something big changes, it ain't going anywhere.
I have never met or spoken to Hamo. But I have worked with and against 100 guys like Hamo.......very smart, aggressive, greedy, Type A alpha male with a huge ego. Absent some financial disaster at nrf/nsam, there is just no way Hamo is going to decrease the dividend again.
I saw Aug 2013 dividend coming as soon as they announced Aug 2012 dividend of 16 cents. 20 cents in Aug 2013 was exactly a double the 10 cent dividend of Aug 2011. I just knew Hamo wanted a double in two years after being forced to reduce the dividend from 36 cents to 10 cents to survive the financial crisis/recession.
He got off the galloping horse of a penny per quarter without getting hurt with an extra 3 cents in Feb ( actually March) for 25 cents. I predicted shortly thereafter that May would be 25 cents and was right. I'm inside Hamo's head on this. There is just no way he will reduce the div in Aug. His ego won't let him.
With a close of 16.90 + 19.00, the combined value is up 3.28% from the 6/30 close of NRF pre-spin.
NSAM is trying to find itself and I expect continued volatility. 19.00 / 66 cent midpoint forward cad = 28.79 times.
I do not expect much more until more news comes out. I expect Aug earnings or thereabouts will bring a new presentation, which will probably not change without other newsworthy items. Nov will bring first NSAM earnings report where most of the market will finally believe it's real.
NRF at 16.90 is 10.30 times forward cad. 12 times 1.64 = 19.68. 15 times = 24.60, which I expect is where Hamo wants it (where a 90% payout results in a 6% yield. I do not expect another spinout soon, but I know Hamo will not stand for a yield over 8%.
To me, nrf is a better value buy while nsam is still an unknown in the marketplace.
We shall see since I have no intention of selling either except to flip.
I bought a card online at the 15 point website to test the system for maintaining anonymity, and got such a hassle I cancelled the order. They send you an email to claim the certificate, then they send you an email to call to verify identity, so I called and got question after question, delay after delay...took 6 minutes on phone and woman said one more verification call was necessary, which is when I told her to cancel order. I'm surprised Shaun made it hard for you. He's the one losing business.
If you have an objection to Tanqueray at Island Wine, your verbal thanks is enough. It was not my intention to put posters through a hassle. Thanks for trying.
"These are now two separate entities, each setting their dividend policies independently."
If you really believe that is the substance of the relationship, it's no wonder you can't multiply and divide by 2.
You're too new here or have a very poor memory. In March 2012, I called for 15 cents in May 2012 (from 13.5 in Feb) and thereafter called 8 dividends in a row, by amount, well in advance of the announcement. When the Aug 2012 dividend of 16 cents was announced, I predicted 20 cents in Aug 2013....a year in advance.
I predict 50 cents in Aug from NRF and a combined 50 cents in Nov, either 36+14 or 35+15. I'll give you 5 to 1 odds. Wanna bet 1,000 I'm wrong?
Fidelity's allocation of stock basis is in the ratio of the closing prices on 7/1......19.20 + 16.80 = 36.00.
Nsam 19.20 / 36.00 = 53.3333% to nsam and 46.6667% to nrf.
For estate and gift tax purposes, IRS uses the average of the hod and lod as the fmv.
Using this method, nsam = 19.20+17.90 / 2 = 18.550 average.
NRF = 17.23+16.68 /2 = 16.955 average
Thus, 18.550+16.955 = 35.505
NSAM = 18.550 /35.505 = 52.24616%, so nrf = 47.75384%
Until NRF speaks on the subject, I doubt Fidelity will change its allocation.
Lemmings believe this junk, just like the Pablo article on seeking alpo. Fine. Those who know this is fecal matter because they know the truth can just make money off the lemmings who don't do the work to know better.
That's the story of my career.....make money off those who are not as well prepared as I am. I win, they lose.
Don't take it personally. I don't suffer any fool (or lazy moocher) lightly, a habit I established many years ago, long before I started stock investing. Staff knew they were going to get beat up when they came into my office. They also knew it was training on how to be an expert witness before they got beat up by an opposing attorney when they were on the witness stand. When they got out of my office without a beating, they knew they had it right.
It's better to get beat up here, on a message board, than get beat up financially by the pros in the market for something you don't understand correctly. Harsh, blunt, brutal, I plead guilty. The other side ain't gunna give you a second chance. Get it right or lose.
No need to apologize. We all make mistakes. Yours happened to be more thick-headed than most, so you got slapped around. That's just me.
NASDAQ website showing after hours low of 18.35 at 16:02:46 and after hours high of 18.9844 at 16:02:51.........63.44 cents in 5 seconds. Now THAT'S nuts.