tlee19802

If CTRE is the company, seems like they just finished paying the $5.88 per share in dividends, part in cash and part in shares. The share issuance added 9.0mm new shares bringing the total share count to 31.4mm shares. Based on the numbers from the investor presentation and the recent Cross Healthcare acquisition, the company should generate about $31 mm in AFFO. CTRE stated that they will pay out ~80% of the AFFO as dividend. This gets me to ~$0.79 per share in dividend or a 6.3% dividend yield based on today’s close at $12.49. According to Rhizome's letter, they bought the shares at a 8% dividend yield which implies the shares have appreciated more than 25% since Rhizome bought it. In addition, CTRE still has some excess cash of ~$50mm by the end of December after paying the $33mm of cash dividend and $12mm for the Cross Healthcare acquisition. This means that CTRE can probably do about another $100mm of acquisitions without raising equity. The new acquisitions should be accretive to earnings as it can be funded from excess cash. I can see CTRE adding $6.5mm of AFFO through acquisitions. This would equate to $1.21 in AFFO and $0.97 per share in dividends which imply a 7.8% dividend at today's closing price of $12.49 per share. The Comps are trading below 6% dividend yield, which translates into another 30% upside on CTRE and more if you collect the dividends. Any thoughts on CTRE and is anyone else in on this name? Investor presentation - http://investor.caretrustreit.com/common/download/download.cfm?companyid=AMDA-2C54HL&fileid=777610&filekey=A1510F3B-9945-4B9D-B238-8B4B613A590B&filename=CareTrust_Investor_Deck_Q2_2014_Release.pdf

Hi, I came across Rhizome Partners previously on JW Mays, which did well for me. Based on their investor letter, I found out that they have a substantial triple net healthcare REIT position. At Rhizome's cost, the REIT trades at a 10% pro-forma 2015 dividend yield. The letter cited a 60-100% upside based on their cost. Rhizome thinks it is trading cheaply due to forced selling and because the company has yet to pay a dividend (but will start soon). I screened the public REITs and I can't reverse engineer this name. Anyone have any insight? They seem to take concentrated positions. Maybe a good fund to clone? Rhizome_Partners_Letter_Q3_2014.pdf Rhizome_Partners_Tearsheet_Q3_2014.pdf

Hi, A friend sent me an investor letter from a Rhizome Partners. I am not sure if it is OK to post the letter here. The fund recently initiated a position in a healthcare REIT (the company was not named in the letter). I am curious to find out what company that is. I came across their presentation on JW Mays before and it did quite well. If it is OK to post, I will upload the letter and maybe someone can tell me which REIT they are referring to?

Hi, I have made a lot of rookie mistakes in the past due to not understanding my investments or not doing enough research (for example, buying shipping companies when they traded at low LTM EBITDA multiples). Lately, I am finding that is it harder for me to concentrate on finding investments due to work, life, and time constraints. How much time do you guys spend on research? How are your YTD returns? Do you work solo, with someone, or do someone manage your money?

There is nothing unethical about discussing a short as long as you do the homework and you are not yelling "fire." Think about all the people who got hurt because of Enron or got pulled into the tech bubbles and real estate bubbles. Hearing a short opinion is a good counter weight against all the bs and marketing we hear from wall street and the company's IR department. Whether you choose to share is your choice. But I definitely appreciate it when someone explains to me why they think xyz company might not be a great buy.

How do you guys feel about China and are you taking any steps to profit or protect yourself in case it blows up?

I would pick any type of far fetched new bio-tech company with a cancer drug coming up in trials. haha.

I would never invest in a restaurant unless it is a fast food joint and just requires unskilled labor. Restaurants do not translate into absentee-run business at all. It is very time consuming, lots of headaches, and managing the inventory and staff is never an easy task. Someone pointed out that with most small businesses "you are essentially buying a job." The guys who are able to offer the highest prices are the ones who plan on working there 7 days a week and not having to pay a manager. If you want something absentee, buy a fast food joint. Buy a rental property. Buy a anything else but a restaurant. What will you do if your chef walks out the door one day?