Hadn't seen this about ARCP. This is good to know.
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Sold DRI in my mother-in-law's portfolio a couple months ago when there still was no logical plan from management. Since her portfolio is income oriented, I couldn't risk the dividend when the last few quarter earnings reports were so disappointing.
Took the proceeds and bought T on a small dip. Increased her earnings stream a bit and I feel much more comfortable.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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05-16-2014, 10:06 PM
(This post was last modified: 05-16-2014, 10:07 PM by earthtodan.)
That makes one Red Lobster branch (plus a few extras, apparently) for each share of ARCP that I own. The 2% escalator and the 8.8% declining comp sales at the restaurant don't really excite me. I'm not going to sell, but I'm going to stop adding, and I'll reinvest my dividends elsewhere.
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I'm not really sure what to make of this one. I don't mind ARCP continuing to grow quickly, but it is hard to imagine that hundreds of Red Lobster locations improves the average quality of their portfolio of properties. I mean, I suppose with the sale Red Lobster might be ripe for a rebranding / turnaround / resurgence and hence might be reliable long-term tenants. But generally I don't think of them as having either strong future business potential OR a vast pile of prime real estate.
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So I said I wouldn't add, but I added 84 shares of ARCP at $11.84 in my Roth IRA because it was just too cheap to pass up. I sympathize with the concerns and criticisms people have with the CEO and recent transactions, but this price is just silly and I see it as a classic fear trade. I'll reduce my position if it hits 15.
The money came from selling part of my SDRL since it ran up a bit.
Did read that the 500 Red Lobster stores were ones that ARCP hand picked from more than 700 that were available. This makes me feel a little better about the deal.
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Picked up more ARCP shares today at 12.03
). I also couldn't resist the bargain. I am not quite as confident as you two seem to be, but I sure hope you are right!