SFI - iStar Financial Inc. (NYSE Stock) - Stock Market Forum, Penny Stocks, FOREX, NASDAQ, AMEX, NYSE, Live Chat

**BadThad** · #1 07-21-2008, 11:43 AM

Another destroyed financial stock market play. I'm thinking this is nearing a bottom, down over 9% on grim Q2 guidance:

Quote:

iStar Financial Inc. Issues Q2 2008 EPS Guidance
Friday, 18 Jul 2008 07:00am EDT
iStar Financial Inc. announced that for second quarter 2008, it expects to report net income per share in the range of $0.05-$0.15 and adjusted earnings (loss) per share (EPS) in the range of ($1.45)-($1.55).

Also, Moody's cut it's rating:

Quote:

NEW YORK (Associated Press) - Moody's Investors Service on Friday downgraded the investment-grade ratings on iStar Financial Inc. one notch, due to the real estate investment trust's expectations for increased loan loss provisions in the second quarter.

Moody's lowered the ratings on the New York-based company to "Baa3" from "Baa2." A rating of "Baa3" is one notch above junk status. The outlook remains negative.

The downgrade follows the company's announcement that it expects to set aside $275 million to cover bad loans during the second quarter.

"Moody's expects iStar's non-performing assets and core earnings to continue to be pressured over the near-term, given the persistent instability of the credit markets," the ratings service said.

In addition to deteriorating asset quality, Moody's is concerned by the higher leverage that remains following iStar's deal with Fremont General Corp. IStar agreed last May to buy the lender's commercial real estate business and part of its commercial loan portfolio for $1.9 billion.

IStar shares dropped $2.87, or 24.3 percent, to close at $8.94. Shares have traded between $8.25 and $43.29 in the past 12 months, and have lost more than half their value since the start of the year.

SFI - iStar Financial Inc. - Google Finance

I expect to see continued PPS downward movement....but I'm watching closely for an entry as this financial is really, really down....over 60% in the last 60 days.

Current PPS: $8.14

**BadThad** · #2 07-21-2008, 11:46 AM

Hummm....oddly....they continue to pay a hefty dividend....we missed it, but it certainly wasn't worth the PPS drop!

Quote:

iStar Financial Declares Regular Quarterly Common Dividend
7:00a ET July 1, 2008 (PR NewsWire)
iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, announced today that the Company's Board of Directors has declared a regular quarterly cash dividend on its common stock of $0.87 per share for the quarter ending June 30, 2008. The $0.87 dividend is payable on July 31, 2008 to holders of record at the close of business on July 15, 2008.

**BadThad** · #3 08-12-2008, 04:00 PM

The company's stock price continues to hang in there, even after earnings:

Quote:

iStar Financial Announces Second Quarter 2008 Results
7:00a ET July 31, 2008 (PR NewsWire)
iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, today reported results for the second quarter ended June 30, 2008.

iStar reported adjusted earnings (loss) for the quarter of ($1.46) per diluted common share, compared with $1.02 for the second quarter 2007. Including net realized gains of $308.4 million, adjusted earnings allocable to common shareholders for the quarter were $0.79 per diluted common share. Adjusted earnings (loss) allocable to common shareholders for the second quarter 2008 were ($196.2) million, compared with $130.0 million for the second quarter 2007. Including net realized gains of $308.4 million, adjusted earnings allocable to common shareholders for the quarter were $105.9 million. Adjusted earnings (loss) represent net income computed in accordance with GAAP, adjusted primarily for preferred dividends, depreciation, depletion, amortization, impairments of goodwill and intangible assets, gain (loss) from discontinued operations and ineffectiveness on interest rate hedges.

Net income allocable to common shareholders for the second quarter was $20.1 million, or $0.15 per diluted common share, compared to $96.3 million, or $0.75 per diluted common share for the second quarter 2007. Please see the financial tables that follow the text of this press release for a detailed reconciliation of adjusted earnings to GAAP net income.

Net investment income for the quarter was $156.1 million, compared to $122.3 million for the second quarter 2007. The year-over-year increase was due to growth in the overall loan portfolio, primarily due to the addition of the Fremont assets as well as the amortization of $16.9 million of Fremont loan portfolio purchase discount recognized in the quarter. Net investment income represents interest income, operating lease income and earnings (loss) from equity method investments, less interest expense, operating costs for corporate tenant lease assets and gain (loss) on early extinguishment of debt.

During the quarter the Company funded a total of $981.1 million under new and pre-existing commitments and received $1.2 billion in gross principal repayments. Of the $1.2 billion, $0.5 billion was utilized to pay down the A-participation interest from the Fremont acquisition. During the quarter, the Company closed two new financing commitments for a total of $13.0 million.

During the quarter, the Company realized a total of $308.4 million of gains on asset sales, generating net proceeds of $815.0 million. As previously announced, the Company, along with its partners, closed on the sale of the TimberStar Southwest joint venture and the venture's 900,000-acre timber property for $1.7 billion, including the assumption of debt. iStar received net proceeds of $417.0 million, representing a gain of $261.7 million, net of minority interest. Additionally, the Company sold its 300,000-acre Maine timber property for $152.9 million, representing a gain of $23.4 million, net of minority interest. The Company also completed the sale of 32 assets in its AutoStar portfolio for total net proceeds of $199.8 million and a gain of $18.4 million. In addition, the Company sold four non-strategic corporate tenant lease assets for total net proceeds of $45.3 million resulting in a total net book gain of $5.0 million.

During the quarter, the Company's adjusted return on average common book equity was negative. Including realized gains, adjusted return on average common book equity was 18.3%. On a GAAP basis, the Company generated return on average common book equity of 3.5%.

The Company's equity represented 23.8% of total capitalization at quarter end versus 22.4% at the end of the prior quarter. The Company's debt to book equity plus accumulated depreciation/depletion and loan loss reserves, each as determined in accordance with GAAP, was 3.2x at June 30, 2008 versus 3.5x at March 31, 2008.

The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 3.13% for the quarter. Excluding the impact of the amortization of the Fremont loan portfolio purchase discount, the Company's net finance margin was 2.75% for the quarter, versus 3.42% in the prior quarter.

As of June 30, 2008, a one percentage point increase in short-term rates, excluding the impact of interest floors in certain loan assets, would have increased the Company's adjusted earnings by 1.3%, which is consistent with its match funding policy.

Summary of Capital Markets and Other Initiatives

During the second quarter, the Company issued $750 million of 8.625% senior unsecured notes due 2013. The Company used the proceeds to repay outstanding U.S. dollar indebtedness under its unsecured revolving credit facilities.

As previously announced, during the second quarter the Company closed on a $948 million first mortgage financing transaction secured by 34 properties in the Company's corporate tenant lease portfolio, representing $1.1 billion of net book value and an appraised value of $1.7 billion. Additionally, the Company repaid the interim facility used to fund the acquisition of Fremont General's commercial real estate lending business.

Since December 31, 2007, the Company has generated $2.9 billion of liquidity through its various capital markets initiatives, strategic asset sales and repayments on its diverse portfolio of assets.

As of June 30, 2008, the Company had $1.4 billion of cash and available capacity under $3.9 billion in revolving credit facilities versus $890.6 million at the end of the prior quarter. The Company is currently in compliance with all of its bank and bond covenants.

Risk Management

At June 30, 2008, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 89.2% of the Company's asset base, versus 86.4% in the prior quarter. The Company's loan portfolio consisted of 78.9% floating rate and 21.1% fixed rate loans, with a weighted average maturity of 2.7 years.

The weighted average last dollar loan-to-value ratio for all structured finance assets was 74.5%. At quarter end, the Company's corporate tenant lease assets were 94.7% leased with a weighted average remaining lease term of 12.1 years. At June 30, 2008, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 3.28 and 2.55, respectively, versus 3.12 and 2.51, respectively, in the prior quarter.

As of June 30, 2008, 39 of the Company's 408 total loans were on non-performing loan (NPL) status, representing $1.3 billion or 10.5% of total gross loan value, compared to 30 loans representing $1.1 billion or 8.0% of total gross loan value in the prior quarter. Gross loan values represent iStar's book value plus the Fremont A-participation interest. The Company's total gross loan value at quarter end was $12.8 billion. The Company's policy is to stop the accrual of interest on loans placed on NPL status.

At the end of the second quarter, the Company had 30 loans on its watch list representing $1.5 billion or 11.4% of total gross loan value, compared to 30 loans representing $1.2 billion or 9.4% of total gross loan value in the prior quarter.

Excluding the Fremont A-participation interest on the associated assets, NPL and watch list assets were $1.1 billion and $1.3 billion, respectively, compared to NPL and watch list assets in the prior quarter of $796.9 million and $1.0 billion, respectively.

At the end of the second quarter, the Company had eight assets classified as other real estate owned (OREO) with a book value of $269.1 million. During the quarter, the Company took title to three properties that served as collateral on its loans, resulting in $10.1 million of charge-offs against the Company's reserve for loan losses. All of the loans were previously on NPL status and had a gross loan value of $75.2 million prior to the Company receiving title to the properties. Additionally, the Company sold two OREO assets during the quarter for total net proceeds of $81.3 million, which approximated book value at the time of the sale.

At June 30, 2008, the Company had $460.1 million in loan loss reserves versus $252.9 million at March 31, 2008. During the second quarter, the Company recorded $276.7 million in loan loss provisions, including $60.0 million of general provisions and $216.7 million of asset specific provisions. The provisions reflect the continued deterioration in the overall credit markets and its impact on the portfolio as determined in the Company's regular quarterly risk ratings review process.

The Company's total loss coverage, defined as the combination of loan loss reserves of $460.1 million and remaining purchase discount from the Fremont acquisition of $94.1 million, was $554.3 million or 4.3% of total gross loan value at the end of the second quarter. This compares to total loss coverage of $367.1 million or 2.8% of total gross loan value in the prior quarter.

During the quarter, the Company recorded $45.2 million of non-cash

mark-to-market impairments on four credits in its portfolio. Also included in the second quarter were $51.5 million of non-cash impairments of goodwill and certain intangibles.

Summary of Fremont Contributions to Quarterly Results

At the end of the second quarter, the Fremont portfolio, including additional fundings made during the quarter, had a gross loan value of $4.5 billion consisting of 178 loans versus $4.9 billion consisting of 193 loans at the end of the first quarter 2008.

At the end of the second quarter, the value of the Fremont A-participation interest in the portfolio was $1.9 billion versus $2.4 billion on March 31, 2008. The book value of iStar's B-participation interest at the end of the second quarter was $2.6 billion versus $2.5 billion on March 31, 2008. During the quarter, iStar received $684.8 million in principal repayments of which the Company retained 30%. The balance of principal repayments was paid to the Fremont A-participation. The weighted average maturity of the portfolio is 10 months.

During the second quarter, iStar funded $313.3 million of commitments related to the portfolio. Unfunded commitments at the end of the second quarter were $1.2 billion, of which the Company expects to fund approximately $1.0 billion based upon its comprehensive review of the portfolio. This compares to unfunded commitments of $1.5 billion at the end of the prior quarter.

At June 30, 2008, there were 26 Fremont loans on NPL status with a gross loan value of $683.0 million versus 20 loans at the prior quarter end, with $494.1 million of gross loan value. In addition, there were 14 loans on the Company's watch list with a gross loan value of $411.8 million versus 14 loans at the prior quarter end, with $405.4 million of gross loan value. Excluding the Fremont A-participation interest on the associated assets, NPL and watch list assets for the Fremont portfolio were $414.6 million and $241.4 million, respectively, versus $238.1 million and $233.3 million in the prior quarter.

Earnings Guidance and Dividend Estimate

Consistent with the Securities and Exchange Commission's Regulation FD and Regulation G, iStar Financial comments on earnings expectations within the context of its regular earnings press releases. For fiscal year 2008, the Company expects diluted adjusted earnings per common share of ($1.75) - ($1.00), and diluted GAAP earnings per common share of ($1.00) - ($0.25).

The Company currently estimates that its third quarter common stock dividend will be in the range of $0.30 - $0.40 per share. The Company's Board of Directors will meet at the end of the third quarter to consider the declaration of the actual dividend for the third quarter. The determination of the actual dividend will be based upon the Company's then-current estimates of its taxable income for the full-year 2008. It is possible that the actual third quarter dividend will be different from the currently expected range. It is the Company's policy to pay annual dividends in an amount equal to 100% of its annual taxable income. The fourth quarter dividend will be based upon the remaining amount necessary to distribute 100% of taxable income for the year as estimated by the Company at that time.

Share Repurchase Program

The Company's Board of Directors has approved a $50 million dollar common stock repurchase program. This program is in addition to the Company's previously disclosed 5 million share repurchase program, which currently has remaining authorization for 700,000 shares. Shares may be purchased under the new program from time to time in the open market and in privately negotiated transactions. There can be no assurance as to the timing or amounts of any purchases under our share repurchase programs.

Current PPS: $7.14

**BadThad** · #4 09-26-2008, 11:24 AM

Bad call on my part, the beatdown continued on this stock.

Current PPS: $3.61

I never bought, but I'm considering a small position in preparation for the bailout.

No other opinions on this one?

Jaywalk rates HOLD. The break down is:

2 STRONG SELL
9 SELL
6 HOLD
0 BUY
2 STRONG BUY

GS rates HOLD

The TA looks like a bottom:

Way below 200MA
Below 9MA
RSI lower than 30
MACD bottomed

Only weakness is light volume 749,000 for first half of day today.

sg1efc · #5 09-26-2008, 01:20 PM

Quote:

Originally Posted by BadThad

No other opinions on this one?

It's near the 52 week low. The Fool says: Next Year Estimated EPS Growth = 194% back on August 29, 2008, for the price back then of: $5.75. Think that is still an accurate estimate BT?

**BadThad** · #6 09-26-2008, 01:57 PM

I dunno....didn't do much DD refreshing. I just saw this on my watchlist and it reminded me. At quick glance, it seems to be an excellent buy/bottom play IMO.

Since they are basically biz and not consumer, I'm not sure if the bailout will help their stock. On the plus side, they are historically a big dividend payer, which always interests me. Last divy at July 2008 for a whopping $0.87....I love those!

sg1efc · #7 09-26-2008, 02:16 PM

UPDATE 1-NYSE adds 7 companies to short-selling ban list
Fri Sep 26, 2008 9:05am EDT

Sept 26 (Reuters) - The New York Stock Exchange added seven companies to its short-selling ban list on Friday, while the Nasdaq added two to its list.

Additions to the NYSE list were Autonation Inc (AN.N: Quote, Profile, Research, Stock Buzz), Zale Corp (ZLC.N: Quote, Profile, Research, Stock Buzz), Wright Express Corp (WXS.N: Quote, Profile, Research, Stock Buzz), iStar Financial Inc SFI.N, Grubb & Ellis Co (GBE.N: Quote, Profile, Research, Stock Buzz), Hersha Hospitality Trust HT.N and Apartment Investment and Management Co AIV.N.

Nasdaq added MRU Holdings Inc (UNCL.O: Quote, Profile, Research, Stock Buzz) and Sears Holdings Corp (SHLD.O: Quote, Profile, Research, Stock Buzz).

The list was started by the U.S. Securities and Exchange Commission as an attempt to crack down on short selling and calm turmoil in global markets that had led to wild price swings in the stocks of major financial firms.

Over the last weekend, the SEC decided to let exchanges add to the list. There are now well over 900 companies covered by the ban.

Short sellers borrow shares they consider overvalued and sell them. If the price drops, they repurchase the shares, return them and pocket the difference. (Reporting by Sweta Singh in Bangalore; Editing by Mike Miller)