What Did You Buy Today?

[crimsonghost747]

Let's add another negative into the list.

-Current market cap is just shy of 300 million. 81.6 million is currently existing properties, 21.2 million is cash, 57.4 million is short term investments, so basically cash. And in some smaller stuff and we get total assets of 161.7 million. Guess we should deduct "accounts payable" and "rent advance/security deposits" which total 8 million.

So we have a market cap of 300 million and only a little over 50% of that is covered by the assets the company owns. Mind you, half of those assets are basically cash. So to really round it up, you get like one quarter of property, one quarter of cash and two quarters of hopes and dreams.

The price to FFO wasn't that concerning when we take into account how much more FFO will be generated when those cash reserves will be used. But when looking at it from this side, it does appear that there is some major overvaluation when compared to other REITs.

[divmenow]

Its not over valued when you look at how much the industry is going to grow over the next 5 years. You know the market always looks ahead. You have to be in the space somehow and this is the safest place to get some exposure to the cannabis industry.

[crimsonghost747]

(09-20-2018, 07:20 AM)divmenow Wrote: Its not over valued when you look at how much the industry is going to grow over the next 5 years. You know the market always looks ahead. You have to be in the space somehow and this is the safest place to get some exposure to the cannabis industry.

If you strictly look at P/B:
If you invest, say $300 into this, you are essentially getting $80 worth of real estate and $70 worth of cash. Now very likely, within the next year or two, all of that cash will be used and you're looking at roughly $150 worth of real estate, hopefully a bit more. You're still buying real estate at double the market price and a P/B of 2 is ridiculously high for a REIT. Usually I don't pay much attention to book value (as it's not the driving force behind the strategy of a company) but with property I do take it into account.

If you look at P/E, then I'd guess that after the cash has been deployed you're looking at about 20. Again, ridiculously high for a REIT.

Let's face it, as a REIT this company has some really high valuations. And that is what it is, a REIT, they own and rent out property.
The P/B you can't really fix unless the real estate magically starts to appreciate double digits every year. P/E can and probably will be fixed with time as the rents go higher. While we might view the cannabis industry as "growing" will it really lead to massive increases in the value of these properties? It won't have any immediate effect on the leases since they will go up at a predetermined amount (was 3.25% for some new deals).

I'll be grabbing some of this anyway as I see that the ffo, which translates to dividends, will increase nicely with the new acquisitions and the yearly increases in leases. And we are probably looking at some decent short term gains because that's how the market is looking at anything that has the word cannabis in it. However saying that "it's not overvalued because it's cannabis related" is kind of a stretch.

[fenders53]

At quick glance looks like a good REIT that has priced itself out for now.  It was a $17 stock 12 months ago.

[jdiv]

Bought some CSCO today.

[fenders53]

Good call on CSCO.  A conservative tech play IMO.  I like their new CEO and their old one (John Chambers) is a legend.  I owned CSCO in the 90s when they were just a networking hardware company.  They were famous for millionaire secretaries in  the 1990s. Startup company and pay was fairly low but they gave them stock options.  Office morale was very high a few years later.   True story.   

I sold some CSCO puts but the stock won't drop so I may have to rinse and repeat until it does to go long.  I will own CSCO again if I have to chase it a little and just buy it.

[Otter]

Initiated a small position in INTC.

[fenders53]

(09-20-2018, 01:42 PM)Otter Wrote: Initiated a small position in INTC.

Very solid company since forever. Give it some patience and average in and I think you'll be pleased. They failed to execute the latest chips and AMD stole their lunch money this year. I owned INTC for a long time and it was usually the other way around. I am confident INTC will be back on top soon enough. They are on my buy list but the BIZ is cyclical so not likely pulling the trigger for awhile.

[divmenow]

IIPR up $4 today to new high. Hope you all added lol

[DividendGarden]

Bought some ABBV yesterday, a new position.

[crimsonghost747]

(09-21-2018, 09:44 AM)divmenow Wrote: IIPR up $4 today to new high. Hope you all added lol

This cannabis thing is getting ridiculous. We have a REIT jumping almost 10% in a single day now with zero related news. When has that happened before? This is starting to remind me of the situation with bitcoin around last Christmas.

But yes I did open a position yesterday, as I said there are some really good things about this one and it's a good way to get into the cannabis craze. Most of the other companies do not qualify for my portfolio as they are not profitable at the moment.

[divmenow]

That's why I said its the only name I will own. I feel bad for all those TLRY holders. We all knew the selling was coming. And this is nothing like Bitcoin. Bitcoin is a myth lol. At least with cannabis it cures a lot of illnesses. Just wait until all the soft drink companies invest in this industry. Its just the beginning. But like I said I wont invest in any of those other names.