When the Against the Sky Portfolio was initially launched, I stated the principles of the portfolio and how investments would be allocated. Now is a good time to look at the current allocations of the portfolio and re-visit the principles as initially conceived.
Over the past several days, I’ve looked at CapitalSource Bank, CapitalSource’s Health Care Real Estate Portfolio, and CapitalSource’s equity in securitization residuals. The equity in each component of these businesses is $916 million, $650 million, and $910 million respectively. All of this for a company with a market capitalization of less than $500 million.
So far, I’ve looked at CapitalSource Bank and CapitalSource’s net leased health care properties. The two combined have a book value of almost $1.3 billion and intrinsic values that are likely 20% higher than this value. Yet CapitalSource has a market cap below $500 million.
Yesterday I began my analysis of CapitalSource with a look at CapitalSource Bank. CapitalSource has a current market capitalization of under $500 million, yet CapitalSource Bank has a book value of $910 million. At year-end there were no delinquencies or non-accruals in the bank’s portfolio, though it had a good portion of CapitalSource’s reserves based mostly on their macro view of the economy. The bank appears to be worth every bit of its book value.
About one year ago, I took a look at CapitalSource (NYSE: CSE), and have since bought shares. At the time, I was drawn to their dividend yield and wanted to make sure that the assets of the company were stable enough for investment. A lot has happened since then in both the broader economy and at the company.
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As the Chinese economy has slowed, so has the remarkable growth of Ctrip. Gone are the days when Ctrip management guided conservatively to 35% net revenue growth while reporting net revenue growth over 50%.
ADP (NYSE: ADP) is the type of stock that everyone wishes they had in their portfolio over the past year. It has held steady despite the economy’s massive job losses. The share price continues to hold up despite the “headwinds” that management acknowledged in their earnings release earlier this month.
Oyo Geospace (NASD: OYOG) announced first quarter earnings last week, and the results were not pretty. Net income fell to $1.3 million or $0.22 per share as compared to net income of $3.3 million or $0.54 per share one year ago. Oyo had earned as much as $4.3 million in the third quarter of 2008, but it seems that as oil prices have fallen there has been less demand for Oyo’s products.
On a day when the Dow is down over 250 points and worry about the banking sector is increasing, Lexington Realty Trust (NYSE: LXP) announced today that they have secured financing for close to $200 million in debt maturing in 2009. As of last quarter, Lexington reported that they had $267 million in maturities for 2009.
Yamana Gold (NYSE: AUY) is a difficult company to follow. It seems that as soon as you get a handle on the business, something changes. I originally bought the company thinking of it as a simple business: Pull gold out of the ground, sell it, profit. It’s not that simple.
