Hi folks. Not much activity here, but thought I’d post my own admittedly limited experiences.
Disclaimer: I’m far from a successful investor. During a fit of highly active day trading (mostly 2021-2023) for example: I downloaded two years’ worth of data, close to a thousand trades, and found my net gain was a fraction of a percent. In other words, nearly dead even. And that was not including a fairly large position taken in Russian stocks in early 2022, which I excluded because I rationalized them as being in limbo.
I tend to look for the underdog, the out of favor stock. Despite the S&P recently hitting a record high, apparently REITs are not doing great. I zeroed in on one that’s been in the news lately: OPI
As a contrarian, I’m attracted to such a speculation precisely because it’s lost favor with those who’d normally invest in it. Here are some of the major reasons:
OPI recently (for all practical purposes) eliminated its dividend (it’s now one cent).
Their core holdings (office real estate) are a tough market. Well, perhaps. I can understand how office work has lost its luster in recent years.
I won’t even delve into the finances of OPI, other than to point out that as far as I could tell from glancing at its financials, it’s price to book is about $36. I’ll admit that I am no expert in analyzing a company, but it seems to me that is rather a steep discount of the many assets that OPI has. It’s not as if office property has dropped precipitously in value.
Inflation (probably) continues higher than official claims. That means that OPI’s debt becomes easier to pay down in real terms.
In general, I’m interested in this REIT because, so far as I can tell, all the bad news that could reasonably happen should have been discounted. The dividend (for all practical purposes) is suspended. Yes, they’re losing money the past few years.
I’m interested enough that I am long 10 December 2024 5 calls at a cost of ~ $700.