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Thoughts on LXP


Junto
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I am curious to see if anyone on the board has done any research into LXP, Lexington Realty Trust (REIT).

 

Through my analysis it is trading at a significant discount to value. Book value less non-controlling investments and other intangibles at 6/30 I estimated at $6.25. The FFO is projected at $1.29-1.34 for 2009 (net of one time charges). It is currently trading at $4.14.

 

Some analysis (not mine but similar viewpoints). I will try to post mine when I have a bit more time than tonight. I just wanted to get the thread going.

 

http://seekingalpha.com/article/137818-lexington-realty-trust-a-solid-reit-with-huge-potential

 

http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_L/threadview?bn=27874&tid=1988&mid=2020  (tcorcoran40 has been providing fairly good analysis on his own right on the Yahoo forum but has a bit of an attitude).

 

 

 

 

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Earlier this year I switched out of some FUR for LXP.  LXP has done some good shareholder friendly actions like buying back debt and preferred at a discount.  The real question here is what will be the cash dividend when they re-instate it next year.  Based upon the current history it may be 0.72 or 1.19 based upon 90% of FFO but analysts have a lower estimate (which is driving the stock price).  So on a potential yield, basis it is undervalued compared to other Triple-net companies such as O and NNN which yield around 7% and imply a LXP value of $10 to $17.  On an EBITDA basis, it is at about 10x EBITDA not cheap but cheaper than NNN and O which have EBITDA's of 17 and 19 respectively.  LXP (if the CFs hold up) is like an inexpensive call option on triple-net RE.  Before the current fall, I was considering moving back to FUR but given the current price I probably will stay with LXP.

 

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