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LowIQinvestor

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DFH after earnings

 

Those order and backlog numbers are stunning.

 

Sun Belt homebuilder on absolute fire? Dont pull my leg now! Who'd have seen that coming?

 

Anyhow, painfully averaged up on the pullback in APTS. Still think there's probably $20 per share or so of upside over the next year or two given the profile of the company and especially the leveraged balance sheet.

 

APTS - nice idea here Greg - thanks much!

 

No problem my man!

 

If you are bullish on that region the portfolio is incredible. Boner worthy even. Probably one of the most misunderstood and under recognized REITs out there. Similar in a lot of ways to CLPR. The majority of the mortgages are long term and fixed rate. Collections across the board have been incredibly strong. MF properties are class A in every sense and newest amongst any public company. Unique development pipeline and strategy....and of course the preferred shares, which are almost unanimously detested but quite genius in their purpose. Probably worthy of a thread but quite a lot to cover and Im somewhat lazy.

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Yup, yup. Meanwhile the uninformed are focusing on whether they can cover the dividend or not and how come the release showed they lost money last year!! Try plugging in modest price appreciation on Sun Belt assets and see what that does to the equation! Actually just try marking the current portfolio to market instead of gross reported GAAP based asset value...

APTS1.thumb.png.d84651d09f311f60ece26479fc6452b7.png

APTS2.thumb.png.4b011e3805530f8b465d4487dadd0f16.png

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APTS looks quite interesting, Thanks. 98% are fixed mortgages at a weighted average interest rate of around 4% with less than 3% of them maturing in the next 2 years. Almost full occupancy even during the pandemic. Common equity is a sliver of the EV and the calls on the common then become an option on an option. If only there were some LEAPs, it would be even more fun.

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My recent adds were BABA and spin-off VNT.

 

VNT looks interestingly GARP-y.

 

Well we have a thread about this. it is currently overearning due to the upgrade cycle for gas stations coming to an conclusion, but I think it will transform over time.

It got the DHR heritage and that means they are likely good operators and capital allocators. I am expecting them to exercise the right to buy out Tritium, the manufacturer of EV chargers.

https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/vnt-vontier/msg433727/#msg433727

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Took a wee little starter in OSCR and CPNG.

 

I looked at both S-1 and I can come to terms with CPNG but what is really OSCR business model, is it like LMND for health insurance. Their numbers look atrocious.

 

Both GOOG health care IPO‘s AMWL and OSCR look underwhelming to me.

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Took a wee little starter in OSCR and CPNG.

 

I looked at both S-1 and I can come to terms with CPNG but what is really OSCR bus8 es model, is it like LMND for health insurance. Their numbers look atrocious.

 

Both GOOG health care IPO‘s AMWL and OSCR look underwhelming to me.

 

I havent even come close to a deep dive, and yea, the approach is at best scattershot, but the impression I have gotten is that somewhat like LMND, theyre focusing on developing the brand. Its not very efficiently rolled out, but they have a little bit of everything...their own clinics, the tele health offering, pricing models that "appear' transparent and are generally received well by their customers. My guess is that they would be burning many times more money if they put all of this into motion in all their markets, all at once. All in all I think its probably burned through a good bit of money experimenting and will continue to do so. At the same time trying a lot of things in a scattershot way sort of lets you feel out the sensitivities of what works and what doesnt. Its in the right place at perhaps the right time....there does seem to be bipartisan support for fixing a lot of the issues in healthcare....so you'll need to cross a few bridges to get there, but there are bridges which lead this to being a bit of a disruptor. At the least its a small starter that will compel me to do a bit more work on it while the market is beating the shit out of companies like this...and if nothing else I'll probably be able to unload it later once things settle down. $32 was the original low point of the IPO range that ended up being revised upwards twice to $39. So I'll take my chances there.

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Bought Clover Corp, Jungfraubahn Holding and a small slice of Dominos in the last week. All around 3 pct. And 9 pct in BTI.

 

This is the Clover Corp in AU that refines and sells natural oils?

Yes. I like the long term story but also thought the stock was way oversold and set up for a large rebound prior to earnings. It's up 50 pct from the lows, so narrative might shift faster than I thought.

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Yup, yup. Meanwhile the uninformed are focusing on whether they can cover the dividend or not and how come the release showed they lost money last year!! Try plugging in modest price appreciation on Sun Belt assets and see what that does to the equation! Actually just try marking the current portfolio to market instead of gross reported GAAP based asset value...

 

Quite an impressive inventory of properties.

 

The management internalization expense makes things look horrible until you look at the potential savings going forward. I put green arrows next to the lines that I assume represent the savings (see attachment). I'm also assuming the $180m expense closed the deal.

 

Thanks, I'm in.

APTS_Management_Internalization.thumb.png.57305439c85108ec61811af3beb96364.png

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Yup, yup. Meanwhile the uninformed are focusing on whether they can cover the dividend or not and how come the release showed they lost money last year!! Try plugging in modest price appreciation on Sun Belt assets and see what that does to the equation! Actually just try marking the current portfolio to market instead of gross reported GAAP based asset value...

 

Quite an impressive inventory of properties.

 

The management internalization expense makes things look horrible until you look at the potential savings going forward. I put green arrows next to the lines that I assume represent the savings (see attachment). I'm also assuming the $180m expense closed the deal.

 

Thanks, I'm in.

 

Yup, the internalization of the manager and the student housing sale were the big ones last year thats seemed to indicate a fundamental shift...both planned before the pandemic even began, rather than being a result of it or anything perceived to be out of desperation. The last call talks a bit about the focus going forward, on fixing up the issues around the capital structure which leaves nothing other than to assume they plan to possibly get rid of more of the preferred, or if nothing else, slow down the pace of issuance. It's Friday after the close so Im wrapping shit up for the week and Ill get into it at a later point, but the preferred were brilliant for what they allowed the company to do and capitalized on a great regulatory loophole...but getting those wound down would greatly benefit existing shareholders.

 

My only caveat, which didnt stop me from buying, and won't stop me from continuing to do so...is management. Things are a little convoluted because we had the external manager issue prior...but if you were a holder of the common pre 2021...and especially pre 2020, it seemed as if there was a growth at all costs/kingdom builder mentality....only problem(or benefit if you are buying now) is that they basically bought stuff that was good if not great, and now just turned into gold because of the pandemic. So they got lucky in terms of emphasizing growth and being focused on the right dirt. Could have just as easily been buying properties in NY/CA etc....moving forward, the signal I get from the moves made in 2020 and the recent call, is that theyre going to be more selective and a little bit more skewed towards getting the common back to a level that makes sense. Some of the preferred issues have warrants or conversion features in the high teens and around $20(none are publicly traded unfortunately)...I also think theres some alignment within the compensation structutre....it is predicated on a TSR and peer group outperformance rather than just buy more sq/ft or whatever.

 

Further, just roughly speaking, you have tremendous leverage to upside. Probably trades conservatively at a 50% discount to NAV and every 10% increase in the portfolio translates to roughly $10 per share on the common. A lot has to go wrong/really, really blow up for things to go poorly at the current price. More than half the asset value is in multifamily. And if you want an idea how undervalued that portfolio is, look at the Creekside sale that took place not long ago.

 

 

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Bought a tiny, 100% speculative XRP position before the trading suspension. Dont give 2 hoots about XRP but I think I am comfortable with my understanding of how SEC related issues get resolved and and while there is always the risk its wiped out or never trades again on a mainstream basis(hence small position), if things go the way I expect them to this should open 3-4x higher than where it is now.

 

https://www.coindesk.com/judge-in-sec-case-drops-bombshells-that-are-positive-for-ripple-xrp-says-lawyer

 

That and Tetragons garbage suit was laughed at

 

https://www.financemagnates.com/cryptocurrency/news/tetragon-lost-case-to-reclaim-175-million-ripple-investment/

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Bought Ping An (HK 2318)

 

Not a bad idea Imo. It’s a pretty cheap stock with decent growth potential going forward and pays a nice dividend as well. Ping An also should befit from higher interest rates - since the Yuan is coupled to the USD, I expect the Internet rated in China to go up as well.

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