NEW YORK (TheStreet) -- Shares of FelCor Lodging were falling 2.5% to $11.23 on heavy trading volume Thursday after the real estate investment trust announced the pricing of the 16 million shares of common stock in its public offering. FelCor Lodging priced the 16 million shares of common stock in the offering at $11.25 a share. The underwriters of the offering have a 30-day option to buy up to 2.4 million additional shares of common stock. The REIT said it expects net proceeds of about $172.6 million from the offering, or $198.5 million if the underwriters fully exercise their option to buy additional shares. FelCor Lodging plans to use the proceeds to redeem its 8% Series C Cumulative Redeemable Preferred Stock and corresponding depositary shares. The redemption is part of the company's "long-term strategy to strengthen its balance sheet and reduce leverage, improve its portfolio quality and enhance returns on investment." About 6.7 million shares of FelCor Lodging were traded by 12:50 p.m. Thursday, above the company's average trading volume of about 804,000 shares a day. TheStreet Ratings team rates FELCOR LODGING TRUST INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate FELCOR LODGING TRUST INC (FCH) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall." Highlights from the analysis by TheStreet Ratings Team goes as follows: Powered by its strong earnings growth of 104.34% and other important driving factors, this stock has surged by 27.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 151.6% when compared to the same quarter one year prior, rising from -$19.87 million to $10.25 million. FCH, with its decline in revenue, underperformed when compared the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. FELCOR LODGING TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FELCOR LODGING TRUST INC turned its bottom line around by earning $0.43 versus -$0.95 in the prior year. For the next year, the market is expecting a contraction of 123.3% in earnings (-$0.10 versus $0.43). The gross profit margin for FELCOR LODGING TRUST INC is currently extremely low, coming in at 6.72%. Regardless of FCH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FCH's net profit margin of 4.95% is significantly lower than the industry average. You can view the full analysis from the report here: FCH Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
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