RAIT

[Guest Bronco]

Anyone follow this little REIT?  Seems like it has gone to hell and (almost) back. 

 

I first learned of this company when it (and myself) were both hq'd in Philadelphia.  They are earning money right now, although I haven't had the time to dig into the #'s. 

 

Any thoughts or feedback, good or bad, let me know.

 

 

[Myth465]

I am looking. I like the fact that they dont pay a dividend. We have a great built in catalyst.

[Guest Bronco]

It looks like an all or nothing situation - either will go up nicely over time or go to zero.  High risk / reward.  But that is my view at 50,000 feet.  Maybe I'll have time to look at this weekend if my 1 year old so allows.

[bttmline]

I've looked into RAIT a couple times in the past and very difficult to value. They are/were a structured product company focused on the real estate industry. They relied purely on CDO's to finance their securitizations and would be interested to see how they are financing new deals other then paydowns from past portfolios. Good news is almost all of their financing was on a non-recourse basis and to the individual pools and typically retained the bottom equity for themselves. 

 

Part of the Cohen family of companies who are very smart and know how to make money, but most of their companies took a huge large hit because so focused on structured finance.  You can get an idea of their other companies by taking a look at Resource America: REXI .   

[Packer16]

I held REXI for awhile then sold recently becasue I did not trust management or unsedstand how they did not make any money.  They appeared to get lucky in selling their leasing company last time and managment gave themselves low priced warrants in a recent financing to meet covenants.  I also had a hard time seeing how they did not make money with the asset management products they provided (thier cost structure is high and profitability is dependent upon generating more revenue in a tough market).  Tilson had a good REXI rationale in his last book but it to date has not come to fruition.  It looks like the ToPRs they manage with end with new regs not counting ToPRs as tier I capital.

 

Packer

[Myth465]

Thanks guys based on the replies im happy to put them in the too hard pile and move on.