Milton Damages and Impacts to Stocks We Own - FRPH AIV ALCO MAA CPT NXRT JOE

[BG2008]

Anyone aware of any meaningful damages caused by Milton so far and the impacts to companies we own? I know that Alico's oranges will be damaged. Obviously anything in the Tampa area will be affected. Let's hive mind this. Thanks in advance. @Gregmal @thepupil

 

In times like this, I prefer to own rock pits as the damages likely result in spikes in demand for rocks and sand to rebuild damaged buildings, houses, etc. 

 

FRPH's tagline should be "Hurricanes destroys oranges, but it can't do jack shit to rock pits" 

 

All kidding aside, I hope for minimal life and property damage to people in the SE. There's been enough drama lately for them. 

[Saluki]

JOE got a direct hit from a category 5 a few years ago and it only got something like $5mm of damage if I recall.  Milton went left to right from Tampa, which is pretty far south, so I'd be surprised if it got any damage this time around. 

 

As for Alico, if it weren't for the hurricane, they'd have to come up with some other excuse for why they can never make money. 

[BG2008]

7 minutes ago, Saluki said:

JOE got a direct hit from a category 5 a few years ago and it only got something like $5mm of damage if I recall.  Milton went left to right from Tampa, which is pretty far south, so I'd be surprised if it got any damage this time around. 

 

As for Alico, if it weren't for the hurricane, they'd have to come up with some other excuse for why they can never make money. 

 

You have to ask yourself "Is the orange worth the squeeze?" 

 

(Even my 7 yr old son is rolling his eyes at this dad joke) 

[Gregmal]

Yea so I dont think any of these stocks have any impacts, let alone material, except for maybe Alico which is a POS anyway. 

 

On the ground, I have a lot of family in that path, and so far, I hate being a broken record, but it sounds like the media overdid it a little bit. No doubt there is some terrible stuff that happened. But by and large, theres not nearly as much as feared. The pictures of course of the Trop roof are edgy, but misleading. The Rays have been in a fight with the city trying to escape that outdated shithole of a stadium, and were already planning to leave in 2028 as its just not a professional level building. My parents are in Hillsborough, a few trees down, power outages. Sister is in Orlando, said it was scary as well when the winds ramped from like 12 am to 5 am, power outage, otherwise, not much. My other sister and her family are in Gainesville and said that Helene was worse. 

[Gregmal]

3 minutes ago, BG2008 said:

 

You have to ask yourself "Is the orange worth the squeeze?" 

 

(Even my 7 yr old son is rolling his eyes at this dad joke) 

They had a window where it could have worked. They missed it because they are bizarrely committed to the orange biz. Even before hurricanes of late, it was beetles, it was 3 days of colder whether, it was always something from them. Its strange too because theyre controlled by hedge fund guys who you'd expect better of. 

[BG2008]

6 minutes ago, Gregmal said:

Yea so I dont think any of these stocks have any impacts, let alone material, except for maybe Alico which is a POS anyway. 

 

On the ground, I have a lot of family in that path, and so far, I hate being a broken record, but it sounds like the media overdid it a little bit. No doubt there is some terrible stuff that happened. But by and large, theres not nearly as much as feared. The pictures of course of the Trop roof are edgy, but misleading. The Rays have been in a fight with the city trying to escape that outdated shithole of a stadium, and were already planning to leave in 2028 as its just not a professional level building. My parents are in Hillsborough, a few trees down, power outages. Sister is in Orlando, said it was scary as well when the winds ramped from like 12 am to 5 am, power outage, otherwise, not much. My other sister and her family are in Gainesville and said that Helene was worse. 

 

Greg,

 

So happy to hear that your family is safe and well. Media sensationalizing events, who would've guessed? Saw some stuff online about that CAT 5 storm facing a lot of wind shear as it approach landfall and downgraded it to CAT 3. I'm not a weather scientist, but I guess that typically happens. Someone online was literally talking about 14% of MAA and CPT's NOI going away bc of this storm. I'm like if those buildings have been there for 20-30 years, it's probably not gonna happen. Bought some more MAA and CPT recently, probably do 15% IRR all in over 3-4 years with like 20% LTV. They're taking leverage up to build more MF units to a 6.5% cap. The way MAA and CPT are playing offense right now is exactly how you want a low leverage public REIT to allocate capital. 

[BG2008]

6 minutes ago, Gregmal said:

They had a window where it could have worked. They missed it because they are bizarrely committed to the orange biz. Even before hurricanes of late, it was beetles, it was 3 days of colder whether, it was always something from them. Its strange too because theyre controlled by hedge fund guys who you'd expect better of. 

 

Some biz are just tough. It's just one tough event after another. Some biz are just better. We got some storm damages? Yeah, you're gonna need more rocks and sand. Again, not making light of the situation. This is just life. Choose your players wisely. 

[Gregmal]

1 hour ago, BG2008 said:

Someone online was literally talking about 14% of MAA and CPT's NOI going away bc of this storm.

Lmfao. Some people will literally say anything for attention. 

[Hektor]

1 hour ago, Saluki said:

As for Alico, if it weren't for the hurricane, they'd have to come up with some other excuse for why they can never make money. 

[Ulti]

https://www.geekwire.com/2024/zillow-adds-climate-risk-data-to-its-real-estate-listings/
 

 I know maybe slightly off thread topic ….

[bizaro86]

I had the excellent timing to buy IMKTA  about a week before Helene. Grocer in the Carolinas, owns tons of real estate, cheap but maybe a bit of a value trap (majority owned, no indication of monetizing RE).

 

Then Helene leveled their owned (and by rumor uninsured) distribution center...

[zzzyx]

IMKTA:  I think the distro center was flooded, not leveled.  That said, how much damage was done, to both the capital asset and inventory?  Must be a couple hundred million at least.  And then business interruption....57% of sales went through that distribution center....how long until it is operational again?

 

Sold the majority of my IMKTA in low 60's last week....would buy it back under $50.

[bizaro86]

4 hours ago, zzzyx said:

IMKTA:  I think the distro center was flooded, not leveled.  That said, how much damage was done, to both the capital asset and inventory?  Must be a couple hundred million at least.  And then business interruption....57% of sales went through that distribution center....how long until it is operational again?

 

Sold the majority of my IMKTA in low 60's last week....would buy it back under $50.

 

Levelled was poor word choice, I knew it was just flooded and was being dramatic. I think your estimate is approximately correct, and given they lost about $230MM in market cap I think the market roughly agrees with you.

 

I thought it was fairly undervalued before and I think the flood is "efficient-markets'd in" now (or at least close) so I'm keeping it. I think there's a decent chance they get some government money as an offset somewhere along the line.

 

Total inventory was $483MM at quarter end, but some of that would have been OK, and probably a lot of stuff got sold directly before the storm as people stocked up to prepare. 

 

I think the big potential upside here is if management finishes the cleanup and says "screw it" and decides to sell.

Edited October 10 by bizaro86

[dwy000]

Not invested in anything here so I'm probably just talking shit but I would have thought the impact on many of these companies from both Helene and Milton would be less direct and more peripheral.  The back-to-back nature of them and the impact will undoubtedly affect insurance costs across the entire state (panhandle was spared but so was Tampa for 100 years) and it's hard to argue that it won't make many people considering the area start to think twice.  

 

That being said, if it leads to redevelopment with hurricane resistant structures and better flooding management it could have a positive longer term impact as it shows survivability - but obviously increases upfront costs.  

[Gregmal]

It isnt as though people arent aware of the storm risk though. Its been shown that there arent more storms than normal occurring, and they arent more intense than historical averages either. Whats changed is the sensationalist, click seeking nature of the reporting about them. I thought this snippet from a Post article was quite funny and accurate....

 

This was a particularly difficult week to suffer what TV has become.

 

It was impossible to escape the sounds and sights of weather warners standing in deadly conditions — pelted by rain, surging seawater and debris-launching, tree-bending, house-splitting winds — to urge viewers to seek shelter from this life-imperiling calamity.

 

Edited October 11 by Gregmal

[73 Reds]

26 minutes ago, Gregmal said:

It isnt as though people arent aware of the storm risk though. Its been shown that there arent more storms than normal occurring, and they arent more intense than historical averages either. Whats changed is the sensationalist, click seeking nature of the reporting about them. I thought this snippet from a Post article was quite funny and accurate....

 

This was a particularly difficult week to suffer what TV has become.

 

It was impossible to escape the sounds and sights of weather warners standing in deadly conditions — pelted by rain, surging seawater and debris-launching, tree-bending, house-splitting winds — to urge viewers to seek shelter from this life-imperiling calamity.

 

What's changed is there are more people and property in the way of the storms.  Don't under-estimate the significance of that.

Edited October 11 by 73 Reds
spelling

[UK]

13 hours ago, Gregmal said:

It isnt as though people arent aware of the storm risk though. Its been shown that there arent more storms than normal occurring, and they arent more intense than historical averages either. Whats changed is the sensationalist, click seeking nature of the reporting about them. I thought this snippet from a Post article was quite funny and accurate....

 

This was a particularly difficult week to suffer what TV has become.

 

It was impossible to escape the sounds and sights of weather warners standing in deadly conditions — pelted by rain, surging seawater and debris-launching, tree-bending, house-splitting winds — to urge viewers to seek shelter from this life-imperiling calamity.

 

 

Free advertising for insurance industry!:)?

[Gregmal]

7 hours ago, UK said:

 

Free advertising for insurance industry!:)?

It’s more just the cycle we’ve seen with everything the last decade. Drama and rhetoric rule the day. Sensationalism for clicks and views. It’s gotten insane. 
 

You look at some of these storms and “the cone” sometimes is 20% of the country lol. They’re doing updates and following storms that are 700 miles out to sea with zero chance of landfall. Every 2mph update on Milton while still 400 miles out was breaking news. 
 

Insurance companies love it because they don’t even need an excuse to raise prices, you just tell people one or two snippets about global warming or let the news about “insurance rates in Florida” take care of itself and that becomes your justification for 20-30% annual increases. Most have no choice but to take it because they need the mortgage. It’s a lot of shenanigans. 

[dwy000]

47 minutes ago, Gregmal said:

It’s more just the cycle we’ve seen with everything the last decade. Drama and rhetoric rule the day. Sensationalism for clicks and views. It’s gotten insane. 
 

You look at some of these storms and “the cone” sometimes is 20% of the country lol. They’re doing updates and following storms that are 700 miles out to sea with zero chance of landfall. Every 2mph update on Milton while still 400 miles out was breaking news. 
 

Insurance companies love it because they don’t even need an excuse to raise prices, you just tell people one or two snippets about global warming or let the news about “insurance rates in Florida” take care of itself and that becomes your justification for 20-30% annual increases. Most have no choice but to take it because they need the mortgage. It’s a lot of shenanigans. 

While there's definitely an increased hype cycle, the number of insurers who have quit Florida (and parts of California), as well as the losses and overwhelming demand at Citizens (insurer of last resort in Florida) would suggest there's underlying truth to the hype.  

 

Insurance is one of the easiest products to shop around so if a couple of companies were trying to gouge prices off the hype they'd lose the business in a heartbeat to others who think they can make money at the lower price.  

Edited October 12 by dwy000

[Gregmal]

26 minutes ago, dwy000 said:

While there's definitely an increased hype cycle, the number of insurers who have quit Florida (and parts of California), as well as the losses and overwhelming demand at Citizens (insurer of last resort in Florida) would suggest there's underlying truth to the hype.  

 

Insurance is one of the easiest products to shop around so if a couple of companies were trying to gouge prices off the hype they'd lose the business in a heartbeat to others who think they can make money at the lower price.  

It depends where you are but this exact dynamic just exacerbates the issue. In the pop msa like Miami or Tampa people know what they’re getting into. But people in Orlando? Or Jacksonville? Those areas they’re getting totally fleeced because of companies leaving the markets and few options overall, and when the renewals come in it’s just “well you know insurance in Florida…” despite these areas being little more susceptible than idk, random parts of Virginia. If I’m not mistaken I’m pretty sure Berkshire even made a big reinsurance bet exploiting this recently. 

[dwy000]

21 minutes ago, Gregmal said:

It depends where you are but this exact dynamic just exacerbates the issue. In the pop msa like Miami or Tampa people know what they’re getting into. But people in Orlando? Or Jacksonville? Those areas they’re getting totally fleeced because of companies leaving the markets and few options overall, and when the renewals come in it’s just “well you know insurance in Florida…” despite these areas being little more susceptible than idk, random parts of Virginia. If I’m not mistaken I’m pretty sure Berkshire even made a big reinsurance bet exploiting this recently. 

It's tough to argue that companies are fleecing their customers because other companies are leaving a market where they can't make money.  

[Pelagic]

One thing that most people outside Florida likely don't realize is that majority of the images of completely destroyed homes that are being shown in the media occurred as a result of tornados spawned by Milton on the East Coast of Florida, primarily in Martin and St. Lucie Counties. These are communities 150+ miles from where Milton made landfall that didn't expect more than strong winds and some rain that are now dealing with total losses. Like the storm surge from Helene that impacted communities much further south than landfall, the tornado threat from Milton affected almost the whole state. 

[73 Reds]

4 minutes ago, Pelagic said:

One thing that most people outside Florida likely don't realize is that majority of the images of completely destroyed homes that are being shown in the media occurred as a result of tornados spawned by Milton on the East Coast of Florida, primarily in Martin and St. Lucie Counties. These are communities 150+ miles from where Milton made landfall that didn't expect more than strong winds and some rain that are now dealing with total losses. Like the storm surge from Helene that impacted communities much further south than landfall, the tornado threat from Milton affected almost the whole state. 

Correct.  Most people outside of storm-prone areas candidly don't understand hurricanes.  The "cone" is largely meaningless, particularly for storms that are strong, large and fast-moving.  Weather forecasters do an abysmal job explaining the risks because they rarely explain the directional differences depending on where you are in relation to potential storm surge and winds, not to mention that often the worst damage comes from outer rain bands far away from the storm's center.  They seem to be getting better at predicting the path of storms farther in advance, but fail miserably in warning those areas ultimately affected by the resulting risks.   Regarding insurance:  My view is a minority view and often perceived as anti-development.  But I believe that there should be areas in storm-prone coastal regions that are uninsurable.  Many coastal areas should remain unimproved.  If you want to build there, you take the risk, not a company and industry which then pawns off your entirely avoidable risk on other more prudent customers.            

[Gregmal]

50 minutes ago, dwy000 said:

It's tough to argue that companies are fleecing their customers because other companies are leaving a market where they can't make money.  

It’s not really. The bulk of carriers had focused on the population centers which have always been the biggest risk. Miami, Boca, Tampa. It’s probably not profitable under the current system in those some of those areas. You’d see rate increases in areas that have seen huge appreciation and lie in flood zones or high risk areas. But that doesn’t explain why areas like say Jacksonville or Orlando are seeing these sort of premium increases. Milton was the storm or the century we were told and Orlando saw 30-40 mph winds and the parks were all open uninterrupted Friday….

 

It’s actually a fairly common phenomenon; we see it in plenty of businesses, commodity based are the absolute easiest example. Large portions of the market are not profitable through the cycles and go away, shut down, consolidate, etc. Then those that are left clean up and print money with little competition. 

[dwy000]

4 hours ago, Gregmal said:

It’s not really. The bulk of carriers had focused on the population centers which have always been the biggest risk. Miami, Boca, Tampa. It’s probably not profitable under the current system in those some of those areas. You’d see rate increases in areas that have seen huge appreciation and lie in flood zones or high risk areas. But that doesn’t explain why areas like say Jacksonville or Orlando are seeing these sort of premium increases. Milton was the storm or the century we were told and Orlando saw 30-40 mph winds and the parks were all open uninterrupted Friday….

 

It’s actually a fairly common phenomenon; we see it in plenty of businesses, commodity based are the absolute easiest example. Large portions of the market are not profitable through the cycles and go away, shut down, consolidate, etc. Then those that are left clean up and print money with little competition. 

Profitability is definitely regional and in Florida it isn't even just weather risk (fraud and litigation risk is one of the bigger causes).  But regardless of regional differences or reasons why, multiple companies have pulled out of the market because they cant make money. The provider of last resort is losing money.   If prices are going up 30% in a business where it takes about 10 minutes to get a competing quote then it's less price gouging than that's the competitive price.  To get prices down you need more supply and nobody seems to be willing to offer it.  The recent storms are unlikely to make companies want to jump into the fray unless they can get massive price hikes.