Comments on: Bankruptcy Probe: Shutting down on April 30? — Stansberry

By: Trade

Trade — Fri, 24 Jul 2009 20:19:46 +0000

PS so far has been wrong on shorting this group. e.g. DDR is up 74%.
I can not believe these companies have clear sailing, however “trade what you see; not what you think”.
I see DDR at resistance on what might be a reverse Head n Shoulder on the weekly. If it breaks up there is upside.
A quick look at the financials (available here http://files.shareholder.com/downloads/ABEA-2D9PYU/688445949×0x308643/62009E5F-8901-49DE-BFD0-3AF26C227F66/2Q09_Financial_Supplement.pdf)

shows:
common equity is only 11% of capitalization;
Base rent /sq ft has gone up every year since 1992 from $8.37 to $18.55. Up to now, they have been a hedge on inflation. This will be the first year their rents have fallen.
The debt only has an average maturity of 2.7 years at an average 4.2% rate.
6% of leases are up for renewal in balance of 2009;
only small amounts of debt are due till June 2010 when $1.17 Billion revolving credit matures.
I wonder if part of the reason DDR has jumped the last 2 days is they are about to test the water with a debt issue. If it goes ok perhaps DDR can break up. If it flops perhaps we take another swing down.

I do not see them going bankrupt in the next year. They have a very diversified portfolio, little debt due and the 10% vacancy has not affected revenues proportionately yet.

Any comments from others?

By: Charles Carpenter

Charles Carpenter — Sun, 19 Apr 2009 18:17:44 +0000

Thanks for the additional information on the potential rewards or risks of shorting, or taking options on these stocks. I for one could have been sucked into this ad. However, your insightful analysis of creative ways the company(s) may avoid or renegotiate its debt is just why I enjoy reading your newsletter. As all ways, the teaser ad doesn’t fully explain risks to their doom and gloom analysis. Your insightful remark that a bank or debt holder would be more willing to renegotiate and wait for better times makes more sense than having an empty building. Thanks again and keep up the good work.
Additionally, I have been following MAC for the last two weeks. I put it on my watch list at 7.40 on 04/02/2009. It is now at a double at 15.36 on 04/18/09!!! Guess I should have bought low and sold high.

By: SageNot

SageNot — Sun, 19 Apr 2009 15:05:26 +0000

Geez, you few guys that are still complaining about losing $$ on Vaxgen. Did you use the trailing STOP, & did you limit your investment to a fraction of your portfolio suggested?

I managed OPM for a living once, I was the man when everything went fine & I can’t print the (*&^%$#@*) I was called when investors IGNORED STOPS & EQUITY EXPOSURE!

You’re making your investment lives a nightmare if YOU WERE ALSO RESPONSIBLE & are taking NONE of the BLAME, it’s not just the mgrs. advice that lost that $$. Most mgrs. use stops & asset diversification, & NO stock should cripple your acct. by itself.

I say this in all fairness, & NO I have no interest in managing anyone’s $$ but my (our) own.

Peace!

By: KA

KA — Fri, 17 Apr 2009 11:26:42 +0000

Sorry for the OT, but I thought you would have liked to know that Mr. Robert Hsu just bought CMED, with a PE ratio of 112…

By: StockGumshoe

StockGumshoe — Fri, 17 Apr 2009 02:46:21 +0000

The only inverse ETF I know of for that sector is SRS from ProShares, the Doubled Inverse of the Dow Jones Real Estate index — much broader than just retail-related REITs, and it suffers from the same compounding problem as all leveraged ETFs (pretty good at matching one day’s move, doesn’t come close to matching longer term performance).