It's really very simple. They paid 25 cents in May with respect to 1Q cad. Why would you expect anything less than 25 cents in August??
There are now half the shares outstanding, so the May 25 cents is now the equivalent of 50 cents on half the shares. May's 25 cents is now 50 cents. Why would you expect less than 50 cents??
2Q cad, which includes all nsam operations excluding fees from nrf, will be higher than 1Q while more shares out will make per share increase minimal. They paid 50 cents on 1Q cad. They will pay 50 cents on 2Q cad.
Hamo will pay out more than 100% of 2Q cad, if necessary, to NOT decrease the dividend from May, which will be restated to reflect the reverse split to 50 cents. Don't expect them to report 29 cents of cad per share on 360 million weighted average shares outstanding in 2Q. They will report 58 cents on 180 million shares.
BTW, ALL per share numbers and shares, including prior years will be restated to reflect the 1 for 2 reverse split.
Get used to it. From now on, ALL applicable numbers are on a post reverse split basis.
Where did I say 50 cents in August would be an ongoing NRF dividend???? How many times do I have to say the NRF Nov dividend will be 36 or 35 cents before the concept sinks in?
Market doesn't understand nsam yet and probably won't until after a financial report and spoonfeeding from Hamo. Same goes for analysts, but not as slow as market.
Just take the headline today. Suppose nrf bought griffin American for 4 billion and used 2 billion of debt and 2 billion of equity to pay for it. 2 billion of new equity at 1.5% = 30 million but Flaherty gets half, so nsam gets 15 million annually. Divide by 200 million shares (after insiders rape us) = 7.5 cents x 80% for 20% tax = 6.00 cents added to 66 cent current cad midpoint. 6/66 = 9% growth.
66 cents at a 29 multiple = 19.14, about where nsam was trading, give or take some volatility.
Well, add 6 cents x 29 = 1.74 (if 6 cents were certain, which it isn't, YET). Nothing near it in nsam today. IMO, because the market doesn't understand.
Whereas NRF estimated cad midpoint = 1.64. I don't have any numbers to estimate effect on cad but I know it will not add 9%. 9% x 1.64 = 14.76 cents. NO way, imo, paying a 25% premium for relatively new properties. With the premium and skim to nsam I doubt such a deal would add more than 5 cents to nrf cad in the early years. 5/1.64 = 3.05%.
Just assuming the above are in the ballpark, nsam grows 9% while nrf grows 3%. Don't have enough facts to be definitive, but nsam growing 3 times faster than nrf would not surprise me, at least in the early years when the smaller denominator at nsam gives it an advantage. IMO, market doesn't have a clue about this yet. Gotta club it over the head with a 2 x 4 by showing it in the rear view mirror (historical financial statements). By then, all the big money will have been made by those who do understand and anticipate.
Ya gotta work hard at it, connect the dots and make reasonable inferences about the future ballpark. I will try to resurrect this post two years from now.
It's a follow-on, not a secondary. And don't assume a griffin deal will be cash. It appears this is a nontraded reit yielding less than 7%. There may be a whole bunch of shareholders who would prefer tax deferred nrf stock yielding over 8%. If this goes down, 30 to 40% cash plus 70 to 60% nrf common would not surprise me.
The hangup to this could be Hamo who does not like current nrf price. Maybe if they announced their dividend expectations (not a promise) soon, nrf will be at over 19........1.44 /19.00 = 7.58% which I suppose Hamo could live with. A roll-up into a partnership is another way to get tax deferred treatment for those who want it, but that is too complicated to explain here.
My apartment bedroom has a common wall with the NRF boardroom and the wall is thin.
Just look at my track record of calling nrf dividends, by amount, well in advance of the announcement. In over 2 years, I only missed one.....March 2014 I called for 22 cents, a continuation of penny per quarter with perhaps a small special dividend. Hamo surprised me with 25 cents, but that was the price he paid to get off the galloping horse of a penny per quarter without getting hurt.
I look at the numbers then inside Hamo's head and I just know. Listening to the board talk about it just reinforces my crystal ball.
"....and just bought them back for 16.42."
Just sold 'em for 16.69, netting another 1,332 for the Christmas fund even though this qualifies as a dinner trade......1.62% in less than 2 hrs......bought back at 12:36 and sold at 2:13.
The Aug dividend will be 50 cents from nrf, which annualizes to 2.00 which to yield exactly 12% calls for a price of 16.666666. So, any purchase price, including commission, of 16.66 or under means the Aug div will annualize to 12% or better.....for Aug div only.
Nov NRF dividend will be 36 or 35 cents, which annualizes to 1.44 or 1.40. So, at 16.66, 1.44 = 8.64%.....and I will bet it's all return of capital for 2014.
Yield hogs, pay attention.
Bought 5,000 NRF 7/1 for 16.71.....sold them on spike for 17.22 (3.03% in 4 trading days) and just bought them back for 16.42.
Did a round trip in nsam yesterday for 1,033. Did another today for 1,582. I'm having a good flip week.
Took a fast look at griffin. At 3/31 they had 3 billion in assets, so 4 billion seems kind of expensive. Once upon a time I could trust Hamo to take care of Hamo in nrf. Now I don't know whether he is looking to take care of Hamo in nsam at the expense of Hamo in nrf. Oh well, I have an equal number of nsam (not counting flippers). Gotta let this and others play out for a while.
NO, not equally. IRS regulations require tax basis of the whole (pre spin nrf) be allocated to the parts (post spin nrf + nsam) in the ratio of the fair market value of the parts. These regs do not state how fair market value of the parts is to be determined. With publicly traded companies, the following can be used:
The closing prices of when issued immediately before the spin.
The opening prices of the parts on the first day parts trade independently.
The closing prices of the parts on the first day of parts trading.........this is what Fidelity used (19.20 + 16.80).
The average of the hod and lod the first day of separate trading.....this must be used for estate and gift taxes.
The average of the open, hod, lod and close the first day (4 elements divided by 4)
USUALLY the company issues a statement mentioning one of the ways and gives the result. Invariably, the brokers use what the company suggests.
In all cases, allocated basis to the parts post spin = aggregate basis of the whole, pre spin. I suggest you pound more on Scottrade. NRF can't help you with respect to your broker.
Because NRF consolidated no longer manages the nontraded reits.
Just do a daily search for "northstar" on the sec website and you will find things like the above faster.
Very good, Wilson. You are on the right track. Now try it again, beginning with unrestricted cash balance in May reported in body of press release and ignore 1Q cad because it is included in the May unrestricted cash.
Otherwise, your methodology is correct. Ignore 2Q cad because that will be paid out in Aug. You are trying to get to unrestricted cash to make new investments. When that gets too low, more capital needs to be raised.
The one thing we don't know is principal collected post may cash balance. This does not get included in cad, is not projected or mentioned by management. So we go with what we do know. Try it again.
They won't. If earnings 8/1, then div announcement 7/31 after close with ex date 8/6 or 7. Offering announced 8/4 with trade date before ex date so buyers get the dividend, thereby disguising the offer price.
Have at it, Wilson. Most of the clues are there. Start with the 1Q earnings press release and walk the cash forward, adding the may offerings and subtracting cash to close the disclosed pendings plus 120 million to nsam. You can assume the upcoming dividend will equal 2Q cad.
Please report your findings here.
Now some of the trading dust has cleared....2 days of wi trading followed by split/spin and brokers not posting timely, the Russell rebalancing and dumping non-reit nsam from reit funds/etfs....all that has cleared. Now I watch trading correlations or the lack thereof today.
NSAM looked like old nrf......up followed by smackdown followed by rope-a-dope to up in last 15 minutes.
NRF took a dive going into close.
For the day, nsam down .74% after being down over 2% with nrf down 1.18% (both per fidelity).
NSAM hod 3.51% above lod on 2.711 million shares.
NRF hod 1.67% above lod on 4.435 million shares.
NSAM volatility more than double nrf's, which is no surprise to me.
NRF volume 66.3% higher than NSAM. I wonder why. Am pondering this. Any suggestions?
Next NRF common issuance should be fun to watch. NRF will go down by the issuance discount aided by the dilution freaks. NSAM SHOULD go up due to additional fee income. If it goes down in knee-jerk following of nrf, I'll jump on it for a flip.
Bought 5,000 shares this morning. Took 32 executions to fill. Sold them 4 min before close. Took 4 executions.
Doesn't really matter. The round trip resulted in a 1,033 dinner trade, a minimum of 4 dinners out. Wife will be pleased.
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.