RAT 0.00% 0.9¢ rubicon america trust

mindless selling of rubicon real estate trusts

  1. 2 Posts.
    Hi all you poor bastards that bought RAT at higher prices -stop worrying and start buying if you are brave. I have bought [email protected],[email protected],[email protected],[email protected], [email protected] - for an average of [email protected] Now I consider myself an intellligent professional investor who spends a lot of time reading financial statements - and actually understanding them. I only invest in shares I understand - NO IT shares etc.

    However way you cut it RAT is totally undervalued - in fact all of them REU,RJT are all undervalued.SO IN THE ABSENCE of MASSIVE FRAUD in all three trusts one has to buy these shares. Look we are all in the same situation in terms of wondering - I wonder if someone knows something we don't? . Lets look at the facts with regard to RAT. Its assets are physical real estate 80% aprox and a loan book aprox 20%. 84% of the physical real estate (33 properties all over the US) is let to US goverment bodies - FBI,IRS,secret service - no worries there. The loan book is diversified so that no single loan is too great. RAT management have kept us up to date with this and as far as we know there are no non performing loans - some have been written down on a mark to market basis but that is just a prudent accounting adjustment based on current conditions not a physical loss. In fact any accounting losses on the loan portfolio have been offset by gains on the loans used to finance them!!

    The gearing of RAT is 75% which means share holder equity is leveraged 4:1. This is high but leverage doesn't kill as long as the loans used to leverage the assets are not coming up for renewal and can't be renewed like in Centro's case. Also as long as the assets that you are leveraging against are not rubbish. RAT passes these tests. RAT also hedges its US dollar exposure both on an income level and on a capital level so currency risk is eliminated. Gordon Fell may have sold out got some cash upfront but the real money he will make is down the road provided the Rubicon real estate companies perform. AFG the manager is in a lot of trouble but this is the manager and we should still focus on the fundamentals of RAT as a stand alone entity. Tommorrow the results will be out - I suspect the NTA will be about $1 on RAT. On Friday RAT paid its dividend as promised. In December they gave guidance of 11.6 c for FY2008. At the close on Friday with a 20c share price this puts the company on a 58% tax deferred dividend PA (paid quarterly). I have also spoken to RAT management - the head of real estate and unless they are lying crooks - its business as usual. We are all worried that there has been some massive fraud - however stock markets work on fear and greed in the short term and I suspect it may be a case of FEAR and mindless selling at present. LONG LIVE RAT - save the RIP for some other share!!
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