Nope, this thing is being drawn like a magnet back to the $9.77 range, where it was just before the merger.
Let’s take a look at their top tenant list: Home Depot, Walgreens, CVC, Circle K, Church’s Chicken, Academy Sports & Outdoors, and Shopko. Hmm, looks like a cross-section of the places America likes to shop.
The Yahoo summary page for SRC shows an annual dividend of $.54/share, but it's really closer to $.65/share, resulting in a yield of about 6.9% (based on today's price).
Barron's had a nice article about SRC around the time of its IPO last year, and that's what prompted me to buy it in the first place. Since that time, it's up about 20%. And as the article points out, the dividend is more like $.65/share, not the $.54 shown on the Yahoo summary page for this REIT.
For long term bonds, the underlying weakness in the economy trumps the shutdown and "default" talk. My only worry over the longer term is Yellen, whose mindless approach to QE will increase inflation expectations (the only thing that really matters when it comes to pricing long-term bonds). The ironic thing is that creating inflation is harder than people think (look at Japan), and we are really in a deflationary environment (wait until you see all the desperate retailers with their massive sales this holiday season).
It was trading at an equivalent value of about $9.77/share before the merger, and that's probably about the right value for this. I think there's still some confusion as to the dividend/distribution post-merger, which should work itself out over the next couple of quarters (even the Yahoo summary page has the wrong dividend amount, which I think is closer to $.65/share, not $.54).
What kind of number are you applying to the real estate? Something like $150/square foot? Are you assuming sale/leaseback for most of it?
I honestly don't know if this is true or not, but if there ends up being more value in selling the company off in pieces, when and how would the money ultimately be distributed to shareholders? Can anyone think of a precedent as to how this would actually work?
Can anyone explain why the US gives those blowhards over $170 million a year? Zero Hedge posted some hilarious charts this morning showing the farcical IMF "growth forecasts" and revisions over time, and concluded "that much taxpayer money could be saved if the monetary fund's staff was replaced with dart-throwing chimps". And by the way, a "recession or worse" would be great for long-term treasuries!
If they tried to dump their holdings, it would hurt the value of their "un-dumped" shares (it takes a while to sell $1.5 trillion in Treasuries), so it won't happen. The vast majority of their holdings are short-term anyway (under 2 years), so it's really not relevant to a fund like TLT, which holds long term bonds.
The 30-year bond yield has dropped about 20 basis points over the past month (resulting in a 4% gain in the value of the bonds themselves). But don't let the facts get in the way of your personal theories as to what bond prices "should" be doing.
Short term treasuries are falling in price, but this ETF invests in long-term treasuries (maturities over 20 years). Inflation expectations are the biggest determinant of long-term treasury yields, and the government shutdown, which adds additional deflationary pressure to the economy, is actually bullish for long-term treasuries.
From his latest monthly missive:
"...the last time the U.S. economy was this highly levered (early 1940s), it took over 25 years of 10-year Treasury rates averaging 3% less than nominal GDP to accomplish a “beautiful deleveraging.” That would place the 10-year Treasury at close to 1% and the policy rate at 25 basis points until sometime around 2035..."
Bill Gross is starting to get it. This is the Japan scenario...
Prem Watsa apparently played a role in securing a $55 million golden parachute for Thorsten Heins, and he negotiated a rare “breakup fee” of $157 million in the event Blackberry backs out of the agreement with Fairfax or finds a higher bidder (fat chance). How could a company this size allow itself to be so manipulated by one individual?