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
Northstar Realty Europe is delivering an attractive shareholder return from a portfolio of prime assets in strong European markets. Net Asset Value rose 27% since 12/31/16 to $20.50/share at 3/31/18 Property Operating Expense declined from 24% of revenue in 2016 to 20% of revenue in 1Q18 Overhead Expense declined from 6.0% of Net Assets in … Continue reading Northstar Realty Europe: Rising Asset Value and Falling Expenses
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
The market is giving an initial thumbs down to Colony Northstar's 4Q17 results. A few observations: Book value per share of $12.52 ($6.8Bn common equity, 543mm shares) Tangible book value per share of $8.43 ($6.8Bn common equity, $1.5Bn goodwill, $0.9Bn intangibles, -0.2Bn minority interest intangibles, 543mm shares) $300mm repurchase plan was completed in 4Q so … Continue reading Colony – A Cry For Help, A Hint of Anesthesia
Colony Northstar shares have fallen sharply in recent weeks (-18% YTD). I believe the selling pressure comes from ex-Northstar executives. The existing share buyback plan was largely completed by November and had little remaining capacity to take advantage of the falling price. In conjunction with the merger Northstar executives negotiated the following equity grants to … Continue reading Colony Northstar May Have Been Pushed Lower By Selling From ex-Northstar Executives
Near-term earnings are a bit weaker than expected and it will take years to realize the expected benefits of the merger The stock trades at one of the lowest valuations in the sector because the balance sheet and income statement remain difficult to analyze The market may have overlooked the benefits of the recently announced … Continue reading Colony Northstar Is Becoming Simpler And More Valuable
Colony Northstar (CLNS) management did an admirable job of bringing their 3-way merger to completion. Northstar Asset Management (NSAM) shareholders have earned a total return over 50% since I wrote last July that shares had potential for a 60% return (LINK). What next? CLNS has not updated its future guidance since the initial merger presentation … Continue reading Colony Northstar Delivered a 50% Return. What’s Next?