A new supplier heard from--Can't see how ppb of WTI can stay over $35 without big hedges buying up the futures. That has to get old soon with no real demand growth or supply cuts.
I have to agree that rig count will start to move up again. Just the news out of WLL is enough to stop the losses going forward.
yet oil remains positive--big money moving the oil markets. Fundamentals are meaningless at this point. No justification except big guys throwing money to the long side. Time to get out of the oil trading business--when they stop following fundamentals , it's just to risky.
WLL , with investment from an un-named third party is going to begin opening back up some inactive fracking wells. If prices stay in the mid 40's this will be the trend, and supply will be in excess by more than it is now. Also, data out of China on gasoline usage was poor--demand was little changed,, not good from the fast growing--or should i say fast slowing economy. Oil is clearly no longer trading on fundamentals.
The question will be"will big money continue to pump the futures up by buying long"? It is the only reason oil prices are where they are today. These last two weeks are about the futures supply and demand and not about oil's supply and demand. Based upon oil supply, price per barrel should already be below $40. But so far trader's are ignoring that and bidding the futures prices up. Scary when the fundamentals don't seem to matter anymore.
Today's action doesn't seem to be following your thesis, thankfully i didn't listen to you. Also, the stock is held in an IRA account, so taxes, at least for now , are not part of the decision. Any analysis you speak of should always factor that possibility in--as I have. But thanks for the comments.
And if i just bought a few moments ago, i would be getting the stock at a great price and the dividend increase next week. Oh wait--I did!
Davis, you know we continue to disagree on this--if they could afford to pay a higher dividend--they would. They absolutely can't because they are so hand-cuffed with access to capital, the whole reason they CUT the dividend by 50%. Also, the dividend could still be cut further to accomplish your 8% goal on a $3 PPS. Question is, how much capital are they in need of? The question of whether they NEED to pay out more is a muddy one, but always remember, if REIT rules would come into play and require a higher payout, they could always choose to pay the excise tax and keep the capital for investment. There is no such thing as "They are forced " to pay a higher dividend--they always have options not to.
First of all, they can't afford it or they would be doing it. Secondly, they don't have to pay you anything--they could choose to pay an excise tax instead of distributing taxable income. Thirdly, the key there--TAXABLE INCOME, not CAD--so that's your number for what they are required to do under REIT regulations and the excise tax is an option. Right now ,they are conserving capital for investment since they have no better alternative at the moment. Don't count on an increase--be happy it's going to remain 12% for now--that's pretty darn good.
OK , so i did look at the interest expense, which only takes IRT results to basically break even FFO and would still not account for RAS to be at an 8 cent loss on consolidation. Stop already--RAS operations are still at a loss and they need to fix this going forward. Hopefully they do, and in the mean time rentals will provide the funds--not income--(cash due to depreciation expense) needed for a dividend payment.
What would be fair to note is that IRT's FFO for the 4th quarter was a positive 19 cents and RAS was a negative 8 cents, so I'm not sure where your math or statement comes from, but the accurate statement would be that IRT has positive operating funds from operations and RAS does not. Spin it however you want, but those are the factual numbers from the earnings reports for the 4th quarter. Not sure what an "operating gain "is , but I'm going to stick with the measures that are most useful to me and most of the rest of the investing world.
Of course you mean February 25th. Share volume has been strong. Even though i am not happy about continued operating losses, the 9 cent dividend should be safe and management on the CC said as much. Who doesn't want to own a solid 15% dividend--regardless of any growth that might occur down the road. I'm in and looks like some other big value players are as well.
is that the dividend appears safe for the foreseeable future. That is as long as they stick to their word. Still don't like the negative FFO, but credits markets being what they are, it could be worse. For now, real estate will deliver between the properties we own out right and through IRT. Perhaps taking some of the cheap debt off the books would help--not sure they have the capital to do it, but it would certainly help with the interest costs. Hanging on for now.
Only one problem with your statement--they CAN NOT afford a higher dividend--if they could they would certainly be paying it--that's the reality you need to come to terms with or your credibility here is out the window.
Thanks--when i looked at it I just was looking at total BV of the company, but you are right, adjusting for the preferred gives you BV per common share. Thanks. Still not sure why the company wouldn't disclose. They always did before when they showed adjusted BV. $1.90 is nothing to be ashamed of--it definitely shows that there is not too much down side risk in a $2.40 stock. Especially when significant assets are property with depreciation costs built in. Not saying real expense doesn't exist like DF would, but they have been able to sell many properties at a gain, so there is reason to believe book is higher than $1.90.
They did report a convoluted adjusted BV, but along with that, they always reported true BV as well, so again , a reader who understands what they are looking at had the information they needed. They also report FFO, and GAAP EPS along with their CAD numbers. It's up to the investor to vet out what matters and what doesn't, but the info is there.