patrick.net

Another boring stock....CPT. Class A multifamily developer.

https://www.camdenliving.com/

I bought stock in both ACI & CPT. CPT has a strong dividend growth and locked in renters. I'm curious what y'alls takes on Dutch Brothers (BROS), CMG and LSCC are.

Dutch Brother's might be having fun with a recession...

Isn't housing going down for next few years ?

They may have great div but if stock goes down it will not net much. Real question is when is best time to buy reits and which ones.

KgK one says

They may have great div but if stock goes down it will not net much. Real question is when is best time to buy reits and which ones.

Camden is a Class A multifamily operator in many well known cities. It should do fine.

1337irr says

Camden is a Class A multifamily operator in many well known cities. It should do fine.

You may be right, not wanting to argue, but I don't see much in cities going well through 2024-25. They might be able to pick up some deals, but if they don't have the cashflow to sustain it could get ugly. I wouldn't want to be in any major metro area. People are leaving and it will continues as the election cycle crime picks up.

If Trump is the nominee expect massive riots and disruption. Especially if the polls look like shit for the Dem nominee. Fact Biden hasn't even announced at this point is opening the floodgates of shit. Let's put it that way.

WookieMan says

If Trump is the nominee expect massive riots and disruption. Especially if the polls look like shit for the Dem nominee. Fact Biden hasn't even announced at this point is opening the floodgates of shit. Let's put it that way.

They're already working on the next Floyd.

1337irr says

Camden is a Class A multifamily operator in many well known cities. It should do fine.

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It is at same stock price as it was in early 2020. Low P/E of only 17.7 and a dividend yield of 3.75%

GuruFocus gives it a very high GF rank of 87 out of 100, which the ranking is based on profitability, growth, momentum, valuation, and financial health.

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Friendly reminder about REITs like CPT.
While most REIT dividends are taxable as ordinary income, they also get one very valuable tax break for investors who qualify. It all comes back to a REIT's fundamental form as an investor-owned real estate portfolio.
Specifically, REIT dividends are generally considered to be pass-through income, similar to money earned by an LLC and passed through to its owners. The Tax Cuts and Jobs Act created a tax deduction called the qualified business income deduction, or QBI deduction for short. Often referred to as the pass-through deduction, this allows taxpayers to deduct as much as 20% of their income that comes from pass-through sources. And ordinary income distributions from REITs qualify.

What do you all make of the options for ACI if they are getting bought at $34.10 a share and the deal closes in 2024?

1337irr says

What do you all make of the options for ACI if they are getting bought at $34.10 a share and the deal closes in 2024?

Since a dividend of $6.85 was paid out in January, the expected deal closing price of $27.25 sometime in 2024. If you want to buy options, you’ll have to buy Jan 2025. The spreads on these call options are very wide, which means lack of liquidity.

If I’m a betting man, I’d buy $25/$27 debit call spreads for 40 cents or so. Gamble 40 cents for a chance to win $1.60 if the deal closes. High chance the deal will close if it gets approved, which seems to be the biggest hurdle.

@Eman makes sense given the regulatory concern is the biggest hold for ACI. I'm just going to buy shares and sell covered calls. Thanks!

On a side note, another company I invest in, UNFI, may spinoff their grocery stores. I wonder if Albertson & UNFI will team up on that end. UNFI owns Cubs.

1337irr says

Eman makes sense given the regulatory concern is the biggest hold for ACI. I'm just going to buy shares and sell covered calls. Thanks!

On a side note, another company I invest in, UNFI, may spinoff their grocery stores. I wonder if Albertson & UNFI will team up on that end. UNFI owns Cubs.

This is a viable option. Collecting 2.4% dividend while selling covered calls and rolling it up and out if need be. I don’t know much about this stock. Good luck.

I think the merger is on...Lina Khan of the FTC is too busy with other things like breaking up Amazon, Meta, etc. She's not going to break-up a grocery store merger. I should probably buy some calls on ACI.

https://www.city-journal.org/article/ftc-chair-lina-khan-fails-upward

https://www.cbsnews.com/news/amazon-antitrust-suit-lina-khan-ftc/

https://www.supermarketnews.com/retail-financial/kroger-albertsons-may-sell-stores-cs-wholesale-grocers-anticipation-merger-deal

WASHINGTON, Oct 12 (Reuters) - California Attorney General Rob Bonta said on Thursday that his office was concerned about Kroger's (KR.N) proposed deal to buy rival Albertsons (ACI.N) for $24.5 billion, and may sue to stop it. Bonta said the decision has not been made, but added: "Right now there's not a lot of reason not to sue." Bonta cited as concerns the prospect of higher prices for consumers, lower payments to California farmers, the potential for creating food deserts and possible adverse impacts on workers.

https://www.reuters.com/markets/deals/california-ag-says-he-may-sue-stop-kroger-buying-albertsons-2023-10-12/

1337irr says

Bonta cited as concerns the prospect of higher prices for consumers, lower payments to California farmers, the potential for creating food deserts and possible adverse impacts on workers.

Albertsons website states there are 124 Albertsons in California.

What are its nearby competitors other than Kroger ?

I do notice even in Florida panhandle that Dollar General has a grocery food section with fruits, vegetables, freezer section for chicken and fish, milk, eggs, etc.

Here in the Florida panhandle it is Walmart and its Sams Club, Publix, Winn Dixie and Piggly Wiggly, as well as Dollar General is starting to get in on grocery supplies.

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1337irr says

Bonta cited as concerns the prospect of higher prices for consumers, lower payments to California farmers, the potential for creating food deserts and possible adverse impacts on workers.

Albertsons website states there are 124 Albertsons in California.

What are its nearby competitors other than Kroger ?

I do notice even in Florida panhandle that Dollar General has a grocery food section with fruits, vegetables, freezer section for chicken and fish, milk, eggs, etc.

Here in the Florida panhandle it is Walmart and its Sams Club, Publix, Winn Dixie and Piggly Wiggly, as well as Dollar General is starting to get in on grocery supplies.

,,,,

Raley’s, Safeway, Savemart, FoodsCo are some of the bigger ones. But I think Aldi actually owns Safeway/Vons and Albertsons so strike them as a competitor I guess.