Colony Credit delivered a disappointing 2018 GAAP loss of $168mm (-$1.41/share) and non-GAAP "Core Earnings" of $86mm ($0.70/share) Share price has fallen to a wide 28% discount to book value while peers trade at an average premium of 19% Management commentary has been consistently overoptimistic Get it right or get out. If returns don't improve … Continue reading Colony Credit: Management Should Get It Right in 2019 Or Get Out
The company remains under-owned and undervalued (31% discount to BVPS compared to average premium of 8% for large cap peers) Earnings expected to cover dividend rate by 2H19 Portfolio return currently below peers due to lower yielding non core assets (real estate and Private equity) and low leverage Colony Credit Real Estate (CLNC) 3Q results … Continue reading Colony Credit: Satisfactory Progress & Bargain Valuation
Target level of leverage and earnings now expected in 2H19 Asset level performance is satisfactory with unlevered yields in line with expectations Portfolio return below peers due to lower yielding non core assets (real estate and Private equity) and low leverage The company remains under-owned (held by only 6 ETFs) and undervalued (12% discount to … Continue reading Colony Credit Needs More Time To Reach Targets
Colony Capital has fallen 62% since the January 2017 Northstar merger The stock trades at 8 times forecast 2018 FFO, one of the lowest multiples in the sector Management has made slow progress at simplifying the business Tangible assets are worth about $0.3Bn less than carrying value, Healthcare overvaluation partially offset by Industrial and Hotels … Continue reading Colony Capital Bottom Seekers – How Big Is The Cushion?
Recently launched Commercial Mortgage REIT should reach earnings potential of $0.54/quarter by year-end Low institutional ownership will rise as the REIT gets new analyst coverage and is added to indices/ETFs Undervalued at a discount of 20% to NAV compared to average premium of 18% for large cap peers (Starwood, Blackstone, Apollo) Potential total return over … Continue reading Colony Northstar Credit: Underowned & Undervalued
Colony Northstar 1Q18 results (press release and supplement). A few points: $279mm shares repurchased (average price of $5.79). I estimate accretion of $0.33 to adjusted equity per share (after removal of Northstar goodwill). This is bigger than earnings. Industrial and Hospitality results look like they are below the pace of guidance and weaker than peers. … Continue reading CLNS 1Q18 Initial Reaction
Colony Northstar shares fell sharply over the past 6 months due to poor operating results and an unclear strategy for improvement 1Q18 earnings are unlikely to hold any surprises. Healthcare peers have been weak, Industrial and Hospitality have been strong. "Unallocated" corporate costs are the biggest uncertainty. With little conviction I estimate $0.74/share of FFO … Continue reading Colony Collapse Disorder: Will CLNS 1Q Results Provide A Cure?
Several things could go right for Colony Northstar Credit Real Estate (CLNC) in coming months: Release of year-end results and conference call will provide an opportunity for the company to introduce itself to investors. $300mm share repurchase plan can begin after results are out. At a price of $20/share, the plan could acquire over 18% … Continue reading Colony Northstar Credit Real Estate Might Not Be A Disaster
The merger of Colony Capital, Northstar Realty, and Northstar Asset Management combined 3 companies with a market cap of about $2Bn into one company whose market cap has fallen to $3Bn. Operating performance has fallen far short of expectations and far short of the partners premerger earnings. Most of the acquired Northstar assets have been … Continue reading Colony Northstar Merger Math 2+2+2=3