Just went through the quarter. Early in year Shiffman said the challenge would be to bring the results of the acq to the bottom line. As dar said - not happening so far. Got bigger just to get bigger, and seem to be picking up the acq pace again after a pause.
Deleveraged a bunch over last few years, and it looks like the $160mm acq in the pipeline, and maybe the shadow pipeline, will be all debt. Should keep company below their 60% debt target, but debt is 6.5x EBITDA. High by industrial stds, but this is a different animal.
Divs - I do not see an increase next qtr if they stick with their policy. Shiffman said will visit the policy after the 1st of year and historically based on 80% of FAD they consider an increase (very clear on those points). Guidance would put this (adjusted) ratio in the high 80s for the 4th qtr (it was 96% this qtr) - still a way to go. But given how they have extended maturities, they may change the policy - used to be 90%.
If they use only debt for the acquisitions, a div increase will come. I am not holding my breath for a big increase in the near term, though.
I am not as familiar with RV parks, but know they are seasonal. Is there much risk of variability? Seems like people have to choose to come back every year, vs a traditional park where they live. Anybody give me their thoughts on this?
Long article, will get around to reading it (and earnings) soon enough - but do know she is long FBP, and one of the posters had a lengthy rejoinder - and he is short FBP. Both sides have a financial interest in their postings, and so may shade their info - whether intentionally or more likely not. (people have an amazing capacity to see what they want to see).
This may be a better article than most on Seeking Alpha, but that is not saying much, imo.
Thanks. Have not gotten to today's paper yet. One of these days I must get around to looking at NRF.
I am not sure a simple lot price tells you everything, though it is useful. By way of analogy, I imagine the "lot value" of Tiffany's stores is much greater than those of Family Dollar. The incremental revenue ($610-$439) may well flow to the bottom line, making the Carlyle communities more profitable than SUIs. A big part of any community is lot expansion - does the 366 lot figure include only developed lots, or include undeveloped lots that can represent expansion.
At $66, SUI would only be yielding 3.8%, absent dividend increases. SUI has not increased the dividend since early 2005 - but they are in a different position now, so that is likely to change. Big increases is a different question.
Good one! Now we have Zacks zombies and the bots that repeat what were once legitimate posts.
warmcamp, thanks for you continued posting of thoughtful analysis.
When I read folks referencing past prices, I simply recall the line from The Lion King, when Rafiki told Simba - It doesn't matter, it is in the past!
I was a bit stunned (I should not have been, mgmt usually clings to hope over reality) when PAAS said they were committed to the dividend. It is the wrong thing to do. Conserve cash. Cut costs - yes, production if necessary. That pile of cash could well shrink rapidly. And mgmt mentions a $100mm capex opportunity to get folks excited.
Relative to ELS just depends upon your time period! SUI has done similarly, or better than ELS for the periods of 5 years or less based on yahoo charts. Stock price, not operations, or div increases or such.
There are many things to like about SUI, but at present prices I do not expect significant, or any, capital gains. (I may get some - those prices in the mid 50s were an absolute gift given the current dividend - but what I currently hold is not for that purpose. I did however, buy SUI for capital gains at much lower prices.) SUI was within spitting distance of this price 10+ years ago. SUI has not raised its dividend since early 2005. What does the future hold?
A catalyst is improving the performance of the acquired properties, given SUI has been on a huge acquisition binge and also deleveraged some. Stay tuned and keep an eye on the quarterlies.
SUI-A is not bad at present prices. dar has enumerated the problems with pfds, and they are real, so you have to be careful.
Certainly not inside info -very much made public. I read transcript. Says will not cut the dividend. Says their all in cost is $20 per ounce, they will return to profitability with silver at current prices down the road. Talks about two developments - one will cost $100 million to do, wonderful at higher prices, not so exciting at existing prices (pulp agglomeration). The other is a vein that may mean a lot more reserves.
Yet cash went down a bunch in the first half and without digging I suspect it will continue going down at a solid clip.
Honestly, they need to disaggregate their financial statements or issue a supplemental financial statement. The use of net cash cost is very deceptive (and I have not seen any definition of all in costs per ounce). To come up with a true financial statement takes pulling numbers from numerous sources. It creates opportunity for those who will put in the effort, but the best management teams usually are upfront about the basics. (And the fact that they have so successfully cut costs (as they claim) also says something about management not having had their eye on the ball.)
Excellent points. Primary silver producers are the marginal producers in the silver market in the sense that something like 75% of silver produced is as a byproduct of mining other metals. The other silver is going to be produced regardless of silver prices and is enough to supply all but investment related demand for silver. The 3x ETF analogy is a good one.
Looked at from that perspective, the primary silver producers become either a mining bet (that mine we are developing has silver, or that mine has a lot more silver than we are getting credit for) or a silver price speculation - whether it be for silver to go up, or for it to hold at a certain level, such as when it as $28-$30 and PAAS was cash flowing profusely..
I am guessing other metals (excl gold) are quite different - the bulk of the supply is from primary producers with small amounts produced on a secondary basis. Of course, they are still subject to supply and demand, and price swings - but demand comes from actual need rather than investment demand.
Eagle Crest in Firestone is the one that might have been flooded. Definitely right next to one, if not two, flood plains. Further, Eagle Crest may have been developed by Sun in the last 15 years, so it will tell us something about their siting if it comes away with no damage (or maybe just something about Firestone's zoning/real estate approval).
I know a non-Sun community near a flood plain. My guess is if it ever floods, it will not be allowed to be re-occupied again by the city. You cannot compare, however, as it really comes down to a specific location and jurisdiction.
Evans got a lot of flooding, but was likely okay. CO as a whole is immaterial financially to SUI with only four communities, but certainly not from a human perspective. Here is hoping all are fine.
Great points. I really should have said not sure they SHOULD increase QE. Anything can be done, and the Fed, while not truly independent, can still do things even if the politicians do not want it done.
Since the US is the best house in a bad neighborhood, they will have plenty of cover to continue too.
All in fun! Discussion, and difference, are important to learning - and you are absolutely right there is room for different views in economics. Just witness the different Fed members/regional presidents, etc.
I have listened to about 20 minutes and not heard it yet (or missed it), unsure when or if I will get to the rest. Prob like earnings calls - 55 minutes of nothing and maybe 30 seconds where they say something important!
It is great short term news for reits and yield trades. Unfortunately, QE cannot go on forever. Tapering, or stopping, allows them to start it back up if needed. Not sure they can increase again from the current level. Suppressed interest rates, imo, create significant misallocations. The longer it goes, the tougher the consequences. Here we go again.
And yes, there will be future opportunities for those with cash and courage - at least I hope so!
Ha ha! Did he say that (I have not seen it in the reports I have read) or is that your interpretation of the Fed's actions?
SUI has 3 communities in areas impacted by the flooding. Looking at maps, it appears one may be affected as it is between two rivers/creeks, another might be but seems unlikely. Anybody know anything?
Page C1 of today's WSJ has an article that relates to our real interest rate discussion. "Bionic Fed is No Match for Bond Market"
Something for everybody! Trailing 12 inflation likely lower than I quoted if the next report is as expected, inflation expectations coming down as measured by TIPS. Premium of 10 yr treasuries to inflation is highest since early 2011, but a full point below the longer term historical relationship.
Just posting it fyi, since we both pay attention to stuff like this.
On to new topics, the market getting excited Summers will not be Fed Chairman? Market forces will likely dictate Yellen or whoever will do about the same as Summers would have, imo. In fact, Bernanke will likely set the course rather than hand it to his successor to chart at the outset.
Thanks for posting this.
While it is certainly not negative, I am not sure there is anything to be drawn from it about SUI other than he does not see bad things ahead. Naftaly is a retired CPA (and one about whom good things are written - including the ability to spot problems ahead of time). Virtually every exercise he has done, even several years ago, has been way early. Has been a director since 06 or 07 and has had a number of exercises. His few open market purchases were good - 08 around $19 per, maybe some more later, and were done in tax deferred plans - IRA and Keough. His direct non retirement holding has climbed not just by option exercise but by the granting of restricted stock, which vests over time.
If I had to guess, he is a smart CPA who manages his taxable income by spreading his exercises out, rather than waiting for them at once. Given his age (75), there is also an estate angle as well. He owns SUI in multiple pockets (IRA, Keough, direct, wife's IRA), so he has lots of tax management options down the road as well.
We are going down rabbit paths here - and you are making incorrect assumptions. I rely on many data points rather than one - and we are talking about measurement, not policy. Fed, Treasury, independent economists, etc. The Fed itself has said in public speeches that the real interest rate is very observable - it is derived from TIPS, which is the Treasury data I cited.
Deflation is a longer discussion. Too bad we cannot have it in person!
Thanks, but you might also look at the Treasury's own data on real rates. 30 year is currently shown at 1.5%, and many sources say the typical real rate is 2-3%, not just 2%. As with all things - no single answer.
We are pushing the boundaries of a message board for a discussion! I really do not want to get into the purposes of QE - I think they are multiple, and have changed. You are right the govt wants inflation. That said, hard to debase the currency when others debase theirs faster (rupee, for example) or peg theirs.
All I meant is deflation is not the devil. It may or may not be at the door, but I do not think it so evil.
There are outside the box solutions that would most likely work for many of the problems we face. You read Mauldin - there was a great quote from one of the govt insiders (Mervyn King maybe?) saying that while (an outside the box approach) might have worked, they could not take even the small risk that it would not in the midst of the crisis. That mentality still holds.