10-04-2014, 04:36 PM
I'm going to initiate a position in it too. It seems like it's trading at a great price, and with a huge increase in revenue (according to Yahoo Finance), it seems like the company's negative EPS and high debt are just this new company trying to break a speed record acquiring a property portfolio that would make Realty Income blush. It all stands on whether that increased revenue will be enough to sustain future earnings growth, pay down the debt, and keep the dividend from disappearing. With property in 49 states as I understand, I should hope that they do just fine.
The big red flag against all that is their portfolio's high reliance on Red Lobster. I have a feeling they were after the properties rather than the restaurant, so all eyes on either Red Lobster to perform well, or ARCP to have a game plan to quickly and cheaply fill those properties in case Red Lobster bottoms out.
The position I initiate will be a small one. It seems like a slightly risky play, but a measured and reasonable one. It's not like it's a biotech penny stock.
The big red flag against all that is their portfolio's high reliance on Red Lobster. I have a feeling they were after the properties rather than the restaurant, so all eyes on either Red Lobster to perform well, or ARCP to have a game plan to quickly and cheaply fill those properties in case Red Lobster bottoms out.
The position I initiate will be a small one. It seems like a slightly risky play, but a measured and reasonable one. It's not like it's a biotech penny stock.