I wanted to get an update out in case subscribers didn’t notice the one I added to yesterdays note. The reason SRG dropped so much is that management updated their portfolio sales estimates in their press release, something I had missed when I originally posted as I was focused on the 10Q, which didn’t contain these estimates.
After all is said and done I was able to put nearly 9% of my portfolio into SRG over yesterday and today. About two thirds is preferred at an average price of $23.24, the rest is common at average price of $6.47.
The reason I made this a significant position is that I spent yesterday modeling outcomes, and feel fairly confident in SRG eventually distributing somewhere between $9 and $15 to shareholders. “fairly” is carrying a lot of weight here, how SRG reports its sales forecast is confusing enough I can’t be strongly confident. Issues include matching up what they include in the sales portfolio and what they don’t (some JV properties), what they might move in and out and why, etc. One example is that a $200M-$300M property seemed to have been removed from the sales portfolio in the last 6 weeks between updates by some method other than sale.
Still I found the margin of safety large enough that it overcame my misgivings. Not a recommendation, do your own research. I’m clearly one of the more optimistic investors here.