short term – Purple Ribbon Project http://purpleribbonproject.com/ Wed, 23 Feb 2022 15:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://purpleribbonproject.com/wp-content/uploads/2021/10/icon-12.png short term – Purple Ribbon Project http://purpleribbonproject.com/ 32 32 Cincinnati Financial Stock Reported Strong Fourth Quarter Results, What to Expect? https://purpleribbonproject.com/cincinnati-financial-stock-reported-strong-fourth-quarter-results-what-to-expect/ Wed, 23 Feb 2022 15:30:19 +0000 https://purpleribbonproject.com/cincinnati-financial-stock-reported-strong-fourth-quarter-results-what-to-expect/ UKRAINE – 03/04/2021: In this photo illustration of the TradingView stock chart of Cincinnati … [+] Financial Corporation seen displayed on a smartphone with the Cincinnati Financial Corporation logo in the background. (Photo illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty Images Cincinnati Financial Action (NASDAQ: CINF) gained 3.7% last week, […]]]>

Cincinnati Financial Action (NASDAQ: CINF) gained 3.7% last week, outperforming the S&P 500 (down 1.4%). Additionally, the stock is up 8.5% over the past month versus a 2.8% drop in the broader markets. Overall, the stock has improved in the short term, unlike the S&P500 index.

The company offers P&C insurance products in the United States. It recently released its fourth quarter results, beating consensus estimates for profit and revenue. Total revenue increased 23% year-on-year to $3.3 billion in the quarter, primarily driven by 10% growth in total premiums and an 8% increase in net income investments. In addition, this translated into a 40% jump in net sales. Along the same lines, CINF’s revenue increased 28% year-on-year to $9.6 billion and net profit improved 142% year-on-year to $2.9 billion in fiscal year 2021. Notably, the unusually high net income figure was due to higher revenues and a decline in total profit and expenses as a % of revenue. The growth above was the main reason for positive investor sentiment towards the stock.

Now, should CINF stock rise further or can we expect a decline? We believe there is a 61% chance of a rise in Cincinnati Financial stock over the next month (21 trading days) based on our machine learning analysis of stock price trends over the past ten last years. See our analysis on Cincinnati Financial Stock Chance Upside.

Additionally, if you are considering Cincinnati Financial stock as a longer-term investment option, you can explore our forecast for Cincinnati Financial Valuation.

Twenty-one day: CINF 8.5%, vs. S&P500 -2.8%; Market outperformed

(11% probability event; 61% upside probability over the next 21 days)

  • Cincinnati Financial Action gained 8.5% over the past twenty-one trading days (one month), versus a broader market (S&P500) down 2.8%
  • A change of 8.5% or more over twenty-one trading days is an 11% probability event, which has occurred 267 out of 2517 times in the last ten years
  • Of these 267 instances, the stock has seen positive movement over the next twenty-one trading days on 163 occasions.
  • This indicates a 61% chance that the stock will rise over the next twenty-one trading days.

Ten days: CINF 3.2%, vs. S&P500 -3.2%; Market outperformed

(23% probability event; 59% upside probability over the next 10 days)

  • Cincinnati Financial Action increased by 3.2% over the past ten trading days (two weeks), versus a broader market (S&P500) down 3.2%
  • A change of 3.2% or more over ten trading days is a 23% probability event, which has occurred 581 out of 2,517 times in the past ten years
  • Of these 581 instances, the stock has seen positive movement over the next ten trading days on 341 occasions.
  • This indicates a 59% chance that the stock will rise over the next ten trading days

Five days: CINF 3.7%, vs. S&P500 -1.4%; Market outperformed

(8% probability event; 61% upside probability over the next five days)

  • Cincinnati Financial Action gained 3.7% over a five-day trading period ending 02/18/2022, relative to the broader market (S&P500) down 1.4%
  • A change of 3.7% or more over five trading days (one week) is an 8% probability event, which has occurred 198 out of 2517 times in the last ten years
  • Of these 198 instances, the stock has seen positive movement over the next five trading days on 120 occasions.
  • This indicates a 61% chance that the stock will rise over the next five trading days

What if you were looking for a more balanced portfolio instead? here is a quality portfolio which has consistently beaten the market since late 2016.

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ALPINE INCOME PROPERTY TRUST, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K) https://purpleribbonproject.com/alpine-income-property-trust-inc-management-report-and-analysis-of-financial-position-and-results-of-operations-form-10-k/ Thu, 10 Feb 2022 21:36:07 +0000 https://purpleribbonproject.com/alpine-income-property-trust-inc-management-report-and-analysis-of-financial-position-and-results-of-operations-form-10-k/ Forward-looking statements When we refer to "we," "us," "our," "PINE," or "the Company," we mean Alpine Income Property Trust, Inc. and its consolidated subsidiaries. References to "Notes to Financial Statements" refer to the Notes to the Consolidated and Combined Financial Statements of Alpine Income Property Trust, Inc. included in Item 8 of this Annual Report […]]]>

Forward-looking statements


When we refer to "we," "us," "our," "PINE," or "the Company," we mean Alpine
Income Property Trust, Inc. and its consolidated subsidiaries. References to
"Notes to Financial Statements" refer to the Notes to the Consolidated and
Combined Financial Statements of Alpine Income Property Trust, Inc. included in
Item 8 of this Annual Report on Form 10-K. Also, when the Company uses any of
the words "anticipate," "assume," "believe," "estimate," "expect," "intend," or
similar expressions, the Company is making forward-looking statements. Although
management believes that the expectations reflected in such forward-looking
statements are based upon present expectations and reasonable assumptions, the
Company's actual results could differ materially from those set forth in the
forward-looking statements. Certain factors that could cause actual results or
events to differ materially from those the Company anticipates or projects are
described in "Item 1A. Risk Factors" of this Annual Report on Form 10-K. Given
these uncertainties, readers are cautioned not to place undue reliance on such
statements, which speak only as of the date of this Annual Report on Form 10-K
or any document incorporated herein by reference. The Company undertakes no
obligation to publicly release any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date of this
Annual Report on Form 10-K.

The following discussion and analysis should be read in conjunction with the consolidated and combined financial statements and related notes included elsewhere in this report.

Overview

Alpine Income Property Trust, Inc. is a Maryland corporation that operates in such a way as to qualify as a REIT for we for federal income tax purposes. Virtually all operations are conducted through our Operational partnership.

We seek to acquire, own and operate primarily freestanding, commercial real
estate properties located in the United States leased primarily pursuant to
triple-net, long-term leases. We focus on investments primarily in retail
properties. We target tenants in industries that we believe are favorably
impacted by current macroeconomic trends that support consumer spending, such as
strong and growing employment and positive consumer sentiment, as well as
tenants in industries that have demonstrated resistance to the impact of the
growing e-commerce retail sector or who use a physical presence as a component
of their omnichannel strategy. We also seek to invest in properties that are net
leased to tenants that we determine have attractive credit characteristics,
stable operating histories and healthy rent coverage levels, are well-located
within their respective markets and have rents at-or-below market rent levels.
Furthermore, we believe that the size of our company allows us, for at least the
near term, to focus our investment activities on the acquisition of single
properties or smaller portfolios of properties that represent a transaction size
that most of our publicly-traded net lease REIT peers will not pursue on a
consistent basis.

Our strategy for investing in income-producing properties is focused on factors
including, but not limited to, long-term real estate fundamentals, including
those markets experiencing significant economic growth. We employ a methodology
for evaluating targeted investments in income-producing properties which
includes an evaluation of: (i) the attributes of the real estate (e.g.,
location, market demographics, comparable properties in the market, etc.); (ii)
an evaluation of the existing tenant(s) (e.g., credit-worthiness, property level
sales, tenant rent levels compared to the market, etc.); (iii) other
market-specific conditions (e.g., tenant industry, job and population growth in
the market, local economy, etc.); and (iv) considerations relating to the
Company's business and strategy (e.g., strategic fit of the asset type, property
management needs, alignment with the Company's structure, etc.).

Our operating results for the year ended December 31, 2021 were in-line with our
expectations and primarily driven by our investment activity of acquiring net
lease properties at valuations and yields generally consistent with our target
investment parameters.

                                       47

  Table of Contents
During the year ended December 31, 2021, the Company acquired 68 properties for
total acquisition volume of $260.3 million.  During the year ended December 31,
2021, the Company disposed of three properties for an aggregate sales price of
$28.3 million, generating combined gains on sale of $9.7 million.

As of December 31, 2021, we owned 113 properties with an aggregate gross
leasable area of 3.3 million square feet, located in 32 states, with a weighted
average remaining lease term of 7.9 years. Our portfolio was 100% leased as of
December 31, 2021.

Historical financial information




The following table summarizes our selected historical financial information for
each of the last three fiscal years (in thousands, except per share and dividend
data). The selected financial information has been derived from our audited
consolidated and combined financial statements.


                                                                                    For the
                                                                                  Period from
                                                                                   November       For the Period
                                         For the Year                             26, 2019 to    from January 1,
                                             Ended          For the Year Ended     December      2019 to November
                                       December 31, 2021    December 31, 2020      31, 2019          25, 2019

                                                            The Company                            Predecessor
Total Revenues                         $          30,128    $           19,248    $     1,394   $           11,837

Net Income (Loss) From Operations      $          15,164    $            2,610    $       (4)   $            3,631

Net Income (Loss)                      $          11,462    $            1,146    $      (45)   $            3,631
Less: Net (Income) Loss
Attributable to Noncontrolling
Interest                                         (1,498)                 (161)              6                    -
Net Income (Loss) Attributable to
Alpine Income Property Trust, Inc.     $           9,964    $              985    $      (39)   $            3,631

Net Income (Loss) Per Share
Attributable to Alpine Income
Property Trust, Inc.
Basic                                  $            1.02    $             0.13    $         -                  N/A
Diluted                                $            0.89    $             0.11    $         -                  N/A

Dividends Declared and Paid            $           1.015    $            0.820    $     0.058                  N/A




























                                       48

  Table of Contents

Balance sheet data (in thousands):




                                                              As of December 31,
                                                               2021        2020
Total Real Estate, at Cost                                  $  444,408   $ 225,889
Real Estate-Net                                             $  428,989   $ 219,339
Cash and Cash Equivalents                                   $    8,851   $   1,894
Intangible Lease Assets-Net                                 $   58,821   $  36,881
Straight-Line Rent Adjustment                               $    1,838   $   2,045
Other Assets                                                $    6,369   $   2,081
Total Assets                                                $  505,514   $ 262,240

Accounts payable, accrued liabilities and other liabilities $2,363 $

1,984

Prepaid Rent and Deferred Revenue                           $    2,033   $ 

1,055

Intangible Lease Liabilities-Net                            $    5,476   $ 
 3,299
Long-Term Debt                                              $  267,740   $ 106,809
Total Liabilities                                           $  277,612   $ 113,147
Total Equity                                                $  227,902   $ 149,093




                          Non-GAAP Financial Measures
Our reported results are presented in accordance with accounting principles
generally accepted in the United States of America ("GAAP"). We also disclose
FFO and AFFO, both of which are non-GAAP financial measures. We believe these
two non-GAAP financial measures are useful to investors because they are widely
accepted industry measures used by analysts and investors to compare the
operating performance of REITs.



FFO and AFFO do not represent cash generated from operating activities and are
not necessarily indicative of cash available to fund cash requirements;
accordingly, they should not be considered alternatives to net income as a
performance measure or cash flows from operations as reported on our statement
of cash flows as a liquidity measure and should be considered in addition to,
and not in lieu of, GAAP financial measures.



We compute FFO in accordance with the definition adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts, or
NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude
extraordinary items (as defined by GAAP), net gain or loss from sales of
depreciable real estate assets, impairment write-downs associated with
depreciable real estate assets and real estate related depreciation and
amortization, including the pro rata share of such adjustments of unconsolidated
subsidiaries. To derive AFFO, we modify the NAREIT computation of FFO to include
other adjustments to GAAP net income related to non-cash revenues and expenses
such as straight-line rental revenue, amortization of deferred financing costs,
amortization of above- and below-market lease related intangibles, non-cash
compensation, and other non-cash income or expense. Such items may cause
short-term fluctuations in net income but have no impact on operating cash flows
or long-term operating performance. We use AFFO as one measure of our
performance when we formulate corporate goals.



FFO is used by management, investors and analysts to facilitate meaningful
comparisons of operating performance between periods and among our peers
primarily because it excludes the effect of real estate depreciation and
amortization and net gains or losses on sales, which are based on historical
costs and implicitly assume that the value of real estate diminishes predictably
over time, rather than fluctuating based on existing market conditions. We
believe that AFFO is an additional useful supplemental measure for investors to
consider because it will help them to better assess our operating performance
without the distortions created by other non-cash revenues or expenses. FFO and
AFFO may not be comparable to similarly titled measures employed by other
companies.





                                       49

  Table of Contents

Reconciliation of non-GAAP measures (in thousands, except share data):





                                                                                              For the
                                                                        

For the Period Period of

                                    For the Year       For the Year      

from november January 1st,

                                        Ended             Ended           

26, 2019 to 2019 to

                                    December 31,       December 31,       

the 31st of December, November 25,

                                        2021               2020               2019             2019

                                                        The Company                         Predecessor
Net Income (Loss)                  $        11,462   $          1,146   $           (45)   $       3,631
Depreciation and Amortization               15,939              9,949                687           4,859
Gain on Disposition of Assets              (9,675)              (287)                  -               -
Funds From Operations              $        17,726   $         10,808   $            642   $       8,490
Adjustments:
Straight-Line Rent Adjustment                (607)            (1,524)               (68)           (410)
COVID-19 Rent Repayments
(Deferrals), Net                               430              (378)                  -               -
Non-Cash Compensation                          309                268                  4             509
Amortization of Deferred
Financing Costs to Interest
Expense                                        362                188                 16               -
Amortization of Deferred
Expenses to Lease Income                         -                  -                  -             277
Amortization of Intangible
Assets and Liabilities to Lease
Income                                       (257)              (108)                (5)           (234)
Other Non-Cash (Income) Expense               (18)               (22)                  -               -
Recurring Capital Expenditures                (41)               (43)                  -               -
Non-Recurring Acquisition Cost
Charge                                           -                  -                216               -

Adjusted operating funds $17,904 $9,189

         805   $       8,632

Weighted Average Number of
Common Shares:
Basic                                    9,781,066          7,588,349          7,902,737             N/A
Diluted                                 11,246,227          8,812,203          9,126,591             N/A



Other data (in thousands, except data per share):



                                                                              For the         For the
                                                                            Period from     Period from
                                                                            November 26,    January 1,
                                                                              2019 to         2019 to
                                  For the Year Ended   For the Year Ended   December 31,   November 25,
                                  December 31, 2021    December 31, 2020        2019           2019

                                                       The Company                          Predecessor
FFO                               $           17,726   $           10,808   $        642   $       8,490
FFO per Diluted Share             $             1.58   $             1.23   $       0.07             N/A

AFFO                              $           17,904   $            9,189   $        805   $       8,632
AFFO per Diluted Share            $             1.59   $             1.04  
$       0.09             N/A








                                       50

  Table of Contents

COMPARISON OF FINANCIAL YEARS DECEMBER 31, 2021 AND 2020




The following presents the Company's results of operations for the year ended
December 31, 2021, as compared to the year ended December 31, 2020 (in
thousands):




                                            For the Year
                                                Ended         For the Year Ended
                                          December 31, 2021   December 31, 2020     $ Variance    % Variance
Revenues:
Lease Income                              $          30,128   $           19,248   $     10,880        56.5%
Total Revenues                                       30,128               19,248         10,880        56.5%
Operating Expenses:
Real Estate Expenses                                  3,673                2,316          1,357        58.6%
General and Administrative Expenses                   5,027                4,660            367         7.9%
Depreciation and Amortization                        15,939                9,949          5,990        60.2%
Total Operating Expenses                             24,639               16,925          7,714        45.6%
Gain on Disposition of Assets                         9,675                  287          9,388      3271.1%
Net Income From Operations                           15,164               
2,610         12,554       481.0%
Interest Expense                                      3,702                1,464          2,238       152.9%
Net Income                                           11,462                1,146         10,316       900.2%
Less: Net Income Attributable to
Noncontrolling Interest                             (1,498)                (161)        (1,337)     (830.4%)
Net Income Attributable to Alpine
Income Property Trust, Inc.               $           9,964   $            
 985   $      8,979       911.6%



Revenue and direct cost of revenue




Revenue from our property operations during the years ended December 31, 2021
and 2020 totaled $30.1 million and $19.2 million, respectively. The increase in
revenues is reflective of the Company's volume of acquisitions. The direct costs
of revenues for our property operations totaled $3.7 million and $2.3 million
during the years ended December 31, 2021 and 2020, respectively. The increase in
the direct cost of revenues is also attributable to the Company's expanded
property portfolio.



General and administrative expenses




The following table represents the Company's general and administrative expenses
for the year ended December 31, 2021 as compared to the year ended December
31,
2020 (in thousands):




                                                  For the Year        For the Year
                                                      Ended               Ended             $
                                                December 31, 2021   December 31, 2020    Variance    % Variance
Management Fee to Manager                       $           3,182   $           2,554   $      628        24.6%
Director Stock Compensation Expense                           309                 268           41        15.3%
Director & Officer Insurance Expense                          499                 459           40         8.7%
Additional General and Administrative Expense               1,037               1,379        (342)      (24.8)%
Total General and Administrative Expenses       $           5,027   $      
    4,660   $      367         7.9%




General and administrative expenses totaled $5.0 million and $4.7 million during
the years ended December 31, 2021 and 2020, respectively. The $0.4 million
increase is primarily attributable to growth in the Company's equity base, which
led to increased management fee expenses totaling $0.6 million.







                                       51

  Table of Contents

Depreciation and amortization




Depreciation and amortization expense totaled $15.9 million and $9.9 million
during the years ended December 31, 2021 and 2020, respectively. The $6.0
million increase in the depreciation and amortization expense is reflective of
the Company's expanded property portfolio.



Interest Expense



Interest expense totaled $3.7 million and $1.5 million during the years ended
December 31, 2021 and 2020, respectively. The $2.2 million increase in interest
expense is attributable to the higher average outstanding debt balance during
the year ended December 31, 2021 as compared to the same period in 2020. The
overall increase in the Company's long-term debt was primarily utilized to fund
the acquisition of properties during 2021 and 2020.



Net Income (Loss)



Net income (loss) totaled $11.5 million and $1.1 million during the years ended
December 31, 2021 and 2020, respectively. The increase in net income is
attributable to the factors described above in addition to the $9.7 million gain
on disposition of assets during the year ended December 31, 2021, an increase of
$9.4 million from the comparable prior year period.



COMPARISON OF THE YEAR ENDED DECEMBER 31, 2020, THE PERIOD FROM NOVEMBER 26,
2019 TO DECEMBER 31, 2019, AND THE PREDECESSOR PERIOD FROM JANUARY 1, 2019
TO
NOVEMBER 25, 2019



The following presents the Company's results of operations for the year ended
December 31, 2020, as compared to the period from November 26, 2019 to December
31, 2019 and the Predecessor period from January 1, 2019 to November 25, 2019
(in thousands)(1):




                                                                    For the
                                                                  Period from
                                                                 November 26,
                                                                    2019 to      For the Period from
                                            For the Year Ended   December 31,    January 1, 2019 to
                                            December 31, 2020        2019         November 25, 2019

                                                       The Company                   Predecessor
Revenues:
Lease Income                                $           19,248   $       1,394   $            11,837
Total Revenues                                          19,248           1,394                11,837
Operating Expenses:
Real Estate Expenses                                     2,316             372                 1,664
General and Administrative Expenses                      4,660            
339                 1,683
Depreciation and Amortization                            9,949             687                 4,859
Total Operating Expenses                                16,925           1,398                 8,206
Gain on Disposition of Assets                              287               -                     -
Net Income (Loss) From Operations                        2,610            
(4)                 3,631
Interest Expense                                         1,464              41                     -
Net Income (Loss)                                        1,146            (45)                 3,631
Less: Net (Income) Loss Attributable to
Noncontrolling Interest                                  (161)               6                     -
Net Income (Loss) Attributable to Alpine
Income Property Trust, Inc.                 $              985   $        (39)   $             3,631


(1) Results of operations before November 26, 2019 represent the Predecessor

CTO activity. After November 26, 2019when acquiring the

initial portfolio of the CTO, the results of operations are presented on a new

    basis of accounting pursuant to ASC 805-10.




                                       52

  Table of Contents

Revenue and direct cost of revenue

Revenue from our property operations totaled $19.3 million during the year ended
December 31, 2020, $1.4 million during the period from November 26, 2019 to
December 31, 2019 and $11.8 million during the Predecessor period from
January 1, 2019 to November 25, 2019. The increase in revenues is reflective of
the Company's volume of acquisitions. The direct costs of revenues for our
property operations totaled $2.3 million during the year ended December 31,
2020, $0.4 million during the period from November 26, 2019 to December 31,
2019, and $1.7 million during the Predecessor period from January 1, 2019 to
November 25, 2019. The increase in the direct cost of revenues is also
attributable to the Company's expanded property portfolio.

General and administrative expenses




The following table represents the Company's general and administrative expenses
for the year ended December 31, 2020 as compared to the period from November 26,
2019 to December 31, 2019 and the Predecessor period from January 1, 2019 to
November 25, 2019 (in thousands):




                                                                       For the
                                                                     Period from    For the Period
                                                                    November 26,     from January
                                                  For the Year         2019 to        1, 2019 to
                                                      Ended         December 31,     November 25,
                                                December 31, 2020       2019             2019

                                                           The Company               Predecessor
Management Fee to Manager                       $           2,554   $         254   $            -
Director Stock Compensation Expense (1)                       268               4              509
Director & Officer Insurance Expense                          459              44                -
Additional General and Administrative Expense               1,379              37                -
Allocation of Predecessor General and
Administrative Expense                                          -               -            1,174
Total General and Administrative Expenses       $           4,660   $      

339 $1,683

(1) For the Predecessor period presented, the stock-based compensation expense represents

    an allocation from CTO.




General and administrative expenses totaled $4.7 million during the year ended
December 31, 2020, $0.3 million during the period from November 26, 2019 to
December 31, 2019, and $1.7 million during the Predecessor period from
January 1, 2019 to November 25, 2019. Changes in general and administrative
expenses are primarily due to the changes in the nature of such expenses, as the
Predecessor period from January 1, 2019 to November 25, 2019 represents an
allocation of the Predecessor parent company expenses versus actual general and
administrative expenses incurred by the Company. The Predecessor general and
administrative expenses were not indicative of the amount of general and
administrative expenses the Company has incurred on an annual basis subsequent
to the IPO. During the year ended December 31, 2020, general and administrative
expenses were primarily impacted by the recognition of $2.6 million of
management fee expenses, of which costs totaled $0.3 million and zero,
respectively, for the period from November 26, 2019 to December 31, 2019 and for
the Predecessor period from January 1, 2019 to November 25, 2019, in addition to
$0.3 million of costs associated with audit services related to the 2019 annual
audit. The fees associated with our annual audit are recognized as the services
are incurred, which typically occurs ratably throughout the year.

Depreciation and amortization

Depreciation and amortization expense totaled $9.9 million during the year ended
December 31, 2020, $0.7 million  during the period from November 26, 2019 to
December 31, 2019, and $4.9 million during the Predecessor period from
January 1, 2019 to November 25, 2019.  The increase in the depreciation and
amortization expense is reflective of the Company's expanded property portfolio.









                                       53

  Table of Contents

Interest Expense



Interest expense totaled $1.5 million during the year ended December 31, 2020,
less than $0.1 million during the period from November 26, 2019 to December 31,
2019, and zero during the Predecessor period from January 1, 2019 to
November 25, 2019. The increase in interest expense is related to the
outstanding balance on the Company's Credit Facility to fund the acquisition of
29 properties during the year ended December 31, 2020.



Net Income (Loss)



Net income (loss) totaled $1.1 million for the year ended December 31, 2020,
less than $(0.1) million for the period from November 26, 2019 to December 31,
2019, and $3.6 million for the Predecessor period from January 1, 2019 to
November 25, 2019. The decrease in net income for the year ended December 31,
2020, as compared to the period from November 26, 2019 to December 31, 2019 and
the Predecessor period from January 1, 2019 to November 25, 2019 is attributable
to the factors described above.



CASH AND CAPITAL RESOURCES

Cash and Cash Equivalents. Cash totaled $9.5 million at December 31, 2021,
including restricted cash of $0.6 million, of which restricted cash balance is
being held in a capital replacement and leasing commissions reserve account in
connection with our financing of six properties.



Long-term debt. From December 31, 2021the company had $51.0 million available on the credit facility. See note 9, “Long-term debt” of the notes to the consolidated and combined financial statements in section 8 for the information provided by the Company concerning the balance of its long-term debt as at December 31, 2021.

Acquisitions and Investments. As noted previously, the Company acquired 68
properties during the year ended December 31, 2021 for an aggregate purchase
price of $260.3 million, as further described in Note 4 "Property Portfolio" in
the notes to the consolidated and combined financial statements in Item 8.

Dispositions. During the year ended December 31, 2021, the Company disposed of
three properties for a total disposition volume of $28.3 million, generating
aggregate gains of $9.7 million, as further described in Note 4 "Property
Portfolio" in the notes to the consolidated and combined financial statements in
Item 8.


Capital expenditure. From December 31, 2021the Company had no commitments related to capital expenditures.




The Company is contractually obligated under its various long-term debt
agreements. In the aggregate, the Company is obligated under such agreements to
repay $269.0 million on long-term basis, to be repaid in excess of one year,
with no payments due within one year.



We believe we will have sufficient liquidity to fund our operations, capital
requirements, maintenance, and debt service requirements over the next twelve
months and into the foreseeable future, with cash on hand, cash flow from our
operations and $51.0 million of available capacity on the existing $150.0
million Credit Facility, based on our current borrowing base of properties,
as
of December 31, 2021.


The Board and management consistently review the allocation of capital with the
goal of providing the best long-term return for our stockholders. These reviews
consider various alternatives, including increasing or decreasing regular
dividends, repurchasing the Company's securities, and retaining funds for
reinvestment. Annually, the Board reviews our business plan and corporate
strategies, and makes adjustments as circumstances warrant. Management's focus
is to continue our strategy of investing in net leased properties by utilizing
the capital we raised in the IPO and available borrowing capacity from the
Credit Facility to increase our portfolio of income-producing properties,
providing stabilized cash flows with strong risk-adjusted returns primarily in
larger metropolitan areas and growth markets.



                                       54

  Table of Contents

CRITICAL ACCOUNTING ESTIMATES


Critical accounting estimates include those estimates made in accordance with
GAAP that involve a significant level of estimation uncertainty and have had or
are reasonably likely to have a material impact on the Company's financial
condition or results of operations. Our most significant estimate is as follows:



Purchase Accounting for Acquisitions of Real Estate Subject to a Lease.  As
required by GAAP, the fair value of the real estate acquired with in-place
leases is allocated to the acquired tangible assets, consisting of land,
building and tenant improvements, and identified intangible assets and
liabilities, consisting of the value of above-market and below-market leases,
the value of in-place leases, and the value of leasing costs, based in each case
on their relative fair values. In allocating the fair value of the identified
intangible assets and liabilities of an acquired property, above-market and
below-market in-place lease values are recorded as other assets or liabilities
based on the present value. The assumptions underlying the allocation of
relative fair values are based on market information including, but not limited
to: (i) the estimate of replacement cost of improvements under the cost
approach, (ii) the estimate of land values based on comparable sales under the
sales comparison approach, and (iii) the estimate of future benefits determined
by either a reasonable rate of return over a single year's net cash flow, or a
forecast of net cash flows projected over a reasonable investment horizon under
the income capitalization approach. The underlying assumptions are subject to
uncertainty and thus any changes to the allocation of fair value to each of the
various line items within the Company's consolidated balance sheets could have
an impact on the Company's financial condition as well as results of operations
due to resulting changes in depreciation and amortization as a result of the
fair value allocation. The acquisitions of real estate subject to this estimate
totaled 68 properties for a combined purchase price of $260.3 million for the
year ended December 31, 2021 and 29 properties for a combined purchase price of
$116.6 million for the year ended December 31, 2020.



See Note 3, “Summary of Significant Accounting Policies”, for a more detailed discussion of the Company’s accounting estimates and policies.

© Edgar Online, source Previews

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Global bonds fell as traders brace for central bank tightening https://purpleribbonproject.com/global-bonds-fell-as-traders-brace-for-central-bank-tightening/ Fri, 04 Feb 2022 18:15:18 +0000 https://purpleribbonproject.com/global-bonds-fell-as-traders-brace-for-central-bank-tightening/ Global government bonds suffered another wave of selling on Friday as traders raised expectations that the world’s major central banks will be forced to take more aggressive action to bring inflation under control. Short-term debt, which is particularly sensitive to monetary policy expectations, was the focus of the sell-off. Due to lower prices, the yield […]]]>

Global government bonds suffered another wave of selling on Friday as traders raised expectations that the world’s major central banks will be forced to take more aggressive action to bring inflation under control.

Short-term debt, which is particularly sensitive to monetary policy expectations, was the focus of the sell-off. Due to lower prices, the yield on two-year US Treasuries – an important global benchmark – jumped 0.11 percentage points to 1.3%. This significant shift, for a market that typically moves in small increments, took returns to the highest level since the start of 2020.

Across the Atlantic, the five-year German Bund yield rose 0.13 percentage points and eventually closed above zero percent for the first time since 2018.

“Pricing of G10 policy rates has shifted strongly towards anticipation of earlier and faster hikes,” said William Marshall, interest rate strategist at Goldman Sachs.

The moves came at the end of a turbulent week for global monetary policymakers. The Bank of England raised its main interest rate for the second consecutive time on Thursday, while on the same day the European Central Bank announced a hawkish turn. A day later, a much stronger-than-expected US labor market report bolstered expectations that the Federal Reserve will aggressively raise borrowing costs this year to curb persistently high price growth.

Bill Papadakis, macro strategist at Lombard Odier, added that “the only key driver in the markets is this hawkish pivot now coordinated by major central banks.”

The speed with which policymakers have had to adjust their plans has been particularly brutal in Europe, where a report on Wednesday showed inflation in the euro zone unexpectedly hit a record high of 5.1%.

ECB President Christine Lagarde acknowledged on Thursday that inflation risks were “tilted to the upside” and declined to rule out rate hikes this year. Only last month she called such a move “highly unlikely”.

The hot inflation data and Lagarde’s more hawkish turn caused a significant adjustment in market expectations for the bank’s monetary policy outlook this year. Markets are now pricing rate hikes by half a percentage point by the end of 2022, up from around 0.12 percentage points at the end of last week, according to Bloomberg market trading data. money markets.

Giovanni Zanni, chief eurozone economist at NatWest, said Lagarde appeared to be “turning into a hawk” as she took more seriously the risks that inflation would continue to significantly exceed the medium-term target of 2 % of the ECB.

“Inflation has been more rigid than initially expected and risks are now on the upside,” said Fabio Bassi, rates strategist at JPMorgan.

Goldman expects the ECB to end its massive asset purchase program in June, followed by a quarter-point hike in the deposit rate in September and December, leaving the main policy rate of the central bank to zero by the end of this year.

Line chart of five-year Bund yield (%) showing a rise in short-term German bond yields due to ECB tightening expectations

A report on Friday showing the U.S. economy added 467,000 jobs last month — far more than the 150,000 expected by Wall Street analysts — bolstered expectations that the Fed will quickly scale back stimulus this year.

Following the jobs report, traders in the futures market began pricing in more US rate hikes. More than five quarter-percentage-point hikes are now expected this year, compared with between four and five before the release, according to Bloomberg data. That puts the Fed’s policy rate forecast at 1.3 percentage points by the end of this year.

Andrew Hunter, senior US economist at Capital Economics, said the Fed was “cleared to take off” on strong jobs numbers.

“The 467,000 gain in nonfarm payrolls in January is even stronger than it looks, as it occurred despite the spike in absenteeism caused by the wave of the Omicron virus and was accompanied significant upward revisions to earnings over the previous two months.”

Additional reporting by Naomi Rovnick

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3 Reasons Growth Investors Will Love Houlihan Lokey (HLI) https://purpleribbonproject.com/3-reasons-growth-investors-will-love-houlihan-lokey-hli/ Mon, 31 Jan 2022 17:45:06 +0000 https://purpleribbonproject.com/3-reasons-growth-investors-will-love-houlihan-lokey-hli/ This story originally appeared on Zacks Growth stocks are attractive to many investors because above-average financial growth allows these stocks to easily capture market attention and deliver exceptional returns. However, finding great growth value is not easy. – Zacks In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could […]]]>

This story originally appeared on Zacks

Growth stocks are attractive to many investors because above-average financial growth allows these stocks to easily capture market attention and deliver exceptional returns. However, finding great growth value is not easy.

– Zacks

In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing a stock whose growth story is actually over or nearing its end.

However, the task of finding leading growth stocks is made easier with the Zacks Growth Style Score (part of the Zacks Style Scores system), which goes beyond traditional growth attributes to analyze the real growth prospects of a company.

Our proprietary system currently recommends Houlihan Lokey (HLI) as one such stock. This company not only has a favorable growth score but also a top Zacks ranking.

Studies have shown that stocks with the best growth characteristics consistently outperform the market. And for stocks that have a combination of a growth score of A or B and a Zacks rank of No. 1 (strong buy) or 2 (buy), the returns are even better.

While there are plenty of reasons why this investment banking firm’s stock is a great growth pick right now, we’ve highlighted three of the most important factors below:

Profit growth

Arguably nothing is more important than earnings growth, as most investors are looking for increased earnings levels. And for growth-oriented investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for Houlihan Lokey is 23.6%, investors should actually focus on projected growth. The company’s EPS is expected to grow 49.8% this year, smashing the industry average, which forecasts EPS growth of 11.8%.

Cash flow growth

Although cash is the lifeblood of any business, above-average cash flow growth is more important and beneficial for growth-oriented businesses than for mature businesses. Indeed, the growth in cash flow allows these companies to expand their activities without depending on costly external funds.

Currently, the year-over-year cash flow growth for Houlihan Lokey is 45.8%, which is higher than most of its peers. In fact, the rate compares to the industry average of -4.3%.

While investors should actually consider current cash flow growth, it’s also worth taking a look at the historical rate to put the current reading into proper perspective. The company’s annualized cash flow growth rate has been 27.1% over the past 3-5 years, compared to an industry average of 14.3%.

Revisions to Promising Earnings Estimates

A stock’s superiority in terms of the metrics outlined above can be further validated by looking at the trend of earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

There have been upward revisions to current year earnings estimates for Houlihan Lokey. The Zacks consensus estimate for the current year jumped 8.8% over the past month.

Conclusion

Houlihan Lokey not only earned a growth score of A based on a number of factors, including those discussed above, but he also carries a No. 1 Zacks rank due to positive earnings estimate revisions.

You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This combination indicates that Houlihan Lokey is a potential outperformer and a solid choice for growth investors.

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As one investor put it, “curing and preventing hundreds of diseases…what should this market be worth?” This company could rival or surpass other recent Zacks stocks that are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in a year.

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To read this article on Zacks.com, click here.

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2022 is ‘the year of the hangover’ due to COVID-19 lockdown and borrowing – ACT chief David Seymour https://purpleribbonproject.com/2022-is-the-year-of-the-hangover-due-to-covid-19-lockdown-and-borrowing-act-chief-david-seymour/ Tue, 25 Jan 2022 02:14:46 +0000 https://purpleribbonproject.com/2022-is-the-year-of-the-hangover-due-to-covid-19-lockdown-and-borrowing-act-chief-david-seymour/ He pointed to “$60 billion in public debt, 5% inflation that some experts say will rise to 6% over the year next term, children who have missed almost six months of school at Auckland, about 37,000 operations not completed by September” and “entire sectors such as export education which have been absent”. ACT’s latest newsletter […]]]>

He pointed to “$60 billion in public debt, 5% inflation that some experts say will rise to 6% over the year next term, children who have missed almost six months of school at Auckland, about 37,000 operations not completed by September” and “entire sectors such as export education which have been absent”.

ACT’s latest newsletter doubles: “This year will be the year of the hangover. New Zealand will feel the effects of our lockdown, lockdown, borrow, spend and print approach to COVID.

“Labour was fooled by the illusion that isolating us from the world for two years would cost us nothing. For the United States, it might be suddenly credible. For a small trading nation of five million people , it’s a fantasy.”

July last year saw the biggest rise in inflation in a decade to 3.3%, driven by rising housing and gasoline prices. It sparked an outpouring of criticism over the government’s heavy borrowing to pay for the COVID-19 response, made possible by the Reserve Bank’s bond-buying program, or “money printing”, which has since ended. .

The Reserve Bank also lowered interest rates to ensure banks continued to lend during the crisis, which helped maintain employment but led to runaway house price inflation. The Reserve Bank has now tightened lending rules and is expected to continue raising the official exchange rate (OCR).

In the government’s latest financial update for 2021, the Treasury predicted that inflation will continue to outpace wage growth in the near future.

“Aggregate demand and wage pressures have combined with continued supply chain disruptions to push consumer price index inflation well outside the Bank of China’s 1-3% target range. New Zealand Reserve.”

Inflation is expected to peak at 5.6% in the March quarter of 2022, which the Treasury said was “significantly higher than the peak expected” in the government’s budget update earlier in the year .

ASB Bank Chief Economist Nick Tuffley now expects annual inflation for the December quarter of 2021 to hit 6.1%.

Economists believe stimulus-spurred consumer purchases are a reason for inflation. But it is not that simple. COVID-19 has also disrupted supply chains around the world, and when too much money is available to buy too few goods and services, demand outstrips supply, driving up prices.

And it’s not unique to New Zealand and not always controllable. The government cannot help, for example, the fact that global supply chains have been disrupted due to COVID-19. Finance Minister Grant Robertson described it as a “global phenomenon” due to the pandemic.

Inflation in the United States, for example, is the highest in almost four decades. The Wall Street Journal attributes this to supply chain disruptions, a shortage of goods and materials, “coupled with strong consumer demand and the benefits of government stimulus.”

National finance spokesman Simon Bridges said inflation could be avoided in New Zealand if the government halted its COVID-19-related spending.

“Basic public spending is expected to rise by 68% since Labor came to power,” he said in December. “While high spending levels were appropriate for much of the pandemic, many economists and people like the Reserve Bank are now confirming that this is an overheated economic picture where adjustments and some relaxation are needed.”

But Robertson says the country needs more investment in areas such as health and climate resilience, hence the government’s gigantic $6 billion “one-time” operating allocation, or new funds, allocated for 2022.

Another way to help limit inflation is to reduce the time contacts of COVID-19 cases have to spend isolating themselves at home, according to Seymour. The government has estimated that 350,000 people at a time could self-isolate during this Omicron outbreak, which will disrupt supply chains.

The government is offering financial support to employers to help them pay their employees who have been asked to self-isolate due to COVID-19 and are unable to work from home.

The leave assistance scheme is $600 per week for a full-time worker and $359 per week for a part-time worker.

There is also short-term absence payment available to help bosses pay employees who cannot work from home while awaiting a COVID-19 test result. This is paid at $359 per eligible worker.

More details on updated contact definitions and isolation requirements under Omicron’s three response phases will be provided on Wednesday by Associate Minister of Health Dr Ayesha Verrall.

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Truist Reveals No-Overdraft Accounts | PYMNTS.com https://purpleribbonproject.com/truist-reveals-no-overdraft-accounts-pymnts-com/ Wed, 19 Jan 2022 18:46:31 +0000 https://purpleribbonproject.com/truist-reveals-no-overdraft-accounts-pymnts-com/ Truist Financial Corporation is set to launch two new no-overdraft checking accounts, making it the latest in a string of banks to move away from this lucrative revenue stream. The accounts will be part of Truist One Banking, which is expected to roll out this summer, the company announced in a press release on Tuesday […]]]>

Truist Financial Corporation is set to launch two new no-overdraft checking accounts, making it the latest in a string of banks to move away from this lucrative revenue stream.

The accounts will be part of Truist One Banking, which is expected to roll out this summer, the company announced in a press release on Tuesday (January 18).

In addition to no overdraft fees, the accounts will also offer a deposit-based line of credit – up to $750 – that does not rely on credit scores for qualification. Truist said that over the next few months it will also be waiving the Returned Item Transfer, Negative Account Balance and Overdraft Protection fees on all accounts.

Read more: More banks dropping lucrative overdraft fees

“Truist wants to change the way people think about banking by creating an experience around what matters most to them,” said Truist CEO Bill Rogers. “Guided by our purpose to inspire and build better lives and communities, we provide banking solutions that improve the financial well-being of our customers and create better pathways to financial inclusion for all.”

The company says these new services address some of the biggest challenges faced by its customers: rejected purchases at the point of sale, lack of access to short-term credit and the impact of unexpected charges.

“For customers who frequently experience overdraft issues, Truist will actively partner to offer assistance and share advisory advice regarding these new offerings,” the company said.

Truist said these changes, coupled with customer benefits from the new accounts, will help customers save about $300 million by 2024.

Read more: BoA to end NSF fees, lower overdraft fees to $10

As PYMNTS reported earlier this month, many banks in the United States have begun eliminating or changing overdraft fees, which brought in an estimated $15.4 billion in 2019, in a bid to compete. FinTechs at no cost and to appease customers and politicians.

Capital One lowered overdraft fees despite making about 0.5% of its revenue from them in 2020, while JP Morgan Chase, the nation’s largest bank, recently announced changes to its overdraft policy.

Last week, Bank of America announced it would eliminate the insufficient funds (NSF) fee and reduce overdraft fees from $35 to $10 starting in May.

——————————

NEW PYMNTS DATA: AUTHENTICATION OF IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

On:More than half of US consumers believe biometric authentication methods are faster, more convenient and more reliable than passwords or PINs. So why do less than 10% use them? PYMNTS, in collaboration with Mitek, surveyed more than 2,200 consumers to better define this perception in relation to the usage gap and identify ways companies can increase usage.

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Seadrill unit files for bankruptcy within 24 hours https://purpleribbonproject.com/seadrill-unit-files-for-bankruptcy-within-24-hours/ Wed, 12 Jan 2022 00:23:00 +0000 https://purpleribbonproject.com/seadrill-unit-files-for-bankruptcy-within-24-hours/ The SEADRILL 3. REUTERS / Luis Enrique Ascui / Files Register now for FREE and unlimited access to Reuters.com Register Restructuring involves Mexican platforms Noteholders take control of the Seadrill unit The names of companies and law firms shown above are generated automatically based on the text of the article. We are improving this functionality […]]]>

The SEADRILL 3. REUTERS / Luis Enrique Ascui / Files

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  • Restructuring involves Mexican platforms
  • Noteholders take control of the Seadrill unit

The names of companies and law firms shown above are generated automatically based on the text of the article. We are improving this functionality as we continue to test and develop in beta. We appreciate comments, which you can provide using the comments tab on the right of the page.

(Reuters) – A unit of offshore driller Seadrill Ltd filed a fast-track reorganization plan in Houston bankruptcy court on Tuesday, where it hopes to seek approval of the proposal on Wednesday.

The case comes just months after its parent entity emerged from its own bankruptcy proceedings. This reorganization plan is expected to come into effect early this year. According to a statement by Financial Controller Tyson de Souza, the Chapter 11 affair of Seadrill New Finance Ltd is supposed to be the “end piece” of the overall restructuring efforts of the Seadrill Group.

De Souza said there was no objection to the plan and that “there is no doubt that it is in the best interests” of the company, which is represented by Kirkland & Ellis.

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A representative from Seadrill Ltd did not immediately respond to a request for comment.

Seadrill New Finance, which has approximately $ 535 million in secured debt, does not operate on its own. It serves as a holding company for a joint venture with an investment fund controlled by Fintech Holdings Ltd. The joint venture, SeaMex Ltd, owns five rigs in Mexico and underwent restructuring last year after state oil company Pemex, a major customer, failed to pay.

Under the proposed plan, holders of secured notes will repossess most of the shares of Seadrill New Finance. The company, which says it has lined up the votes it needs from creditors, will ask U.S. bankruptcy judge David Jones to approve the plan on Wednesday afternoon.

Seadrill Ltd went bankrupt in 2018, emerging with billions of dollars in lost debt and $ 1 billion in new investments. He returned to Chapter 11 in 2021, blaming the sustained downturn in the oil and gas market and the economic impact of the COVID-19 pandemic.

Jones signed Seadrill Ltd’s latest restructuring plan in October, which aimed to reduce the company’s $ 5.6 billion debt by $ 4.9 billion.

Although unusual, one-day cases in Chapter 11 have appeared occasionally in recent years. Kirkland, who also represented the parent entity in its Chapter 11 cases, has previously guided companies through these types of quick restructurings in court.

The case is In re Seadrill New Finance Ltd, United States Bankruptcy Court, Southern District of Texas, 22-9001.

For Seadrill New Finance: Anup Sathy, Ross Kwasteniet, Spencer Winters, Christopher Marcus and Jaimie Fedell of Kirkland & Ellis; and Matthew Cavenaugh, Jennifer Wertz, Vienna Anaya and Victoria Argeroplos of Jackson Walker

Read more:

Mexican Ministry of Finance Completes Refinancing of Pemex Short-Term Debt

Seadrill lenders agree to extend cash usage, for now

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Our standards: Thomson Reuters Trust Principles.

market volatility are quite low. A Systematic Liquid Funds Investment Plan (SIP) can help you accumulate the desired fund.

Whereas previously an emergency fund equal to six months of expenditure was desirable, given the timelines, an emergency fund of one year’s expenditure is ideal. With this fund in your kitty, you can easily overcome lack of cash and ensure key needs are met without hassle.

Conclusion

The new variant of Covid-19 has shaken investor confidence and brought an air of uncertainty. However, having these items in your wallet can help you manage your finances better, ensure you reach your goals, and stay on solid ground.

]]> Find out that financial stocks have 11% upside potential https://purpleribbonproject.com/find-out-that-financial-stocks-have-11-upside-potential/ Wed, 05 Jan 2022 08:00:00 +0000 https://purpleribbonproject.com/find-out-that-financial-stocks-have-11-upside-potential/ UKRAINE – 2021/06/17: In this photo illustration a Discover Financial Services Inc. logo seen … [+] displayed on smartphone and pc screen in background. (Photo illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty Images [Updated 01/05/2022] Check out the Financial Stock update Discover the financial action (NYSE: DFS) has gained around […]]]>

[Updated 01/05/2022] Check out the Financial Stock update

Discover the financial action (NYSE: DFS) has gained around 28% in 2021 and is currently trading around $119. By comparison, the S&P500 is up 27% over the same period. That said, the stock has lost 3% in value since the third quarter results. Trefis estimates Discover the valuation of Financial at around $134 per share, or around 11% above the current market price. The company posted better-than-expected results in the third quarter, with revenue up slightly year-over-year. Although net interest income and discount and interchange fees showed some growth, this was partially offset by unrealized gains/(losses) on equity investments. Revenue improved in the first nine months of 2021 and we expect the trend to continue in the fourth quarter. Notably, the consensus estimates for fourth-quarter revenue and profit are around $2.99 ​​billion and $3.52, respectively.

The company’s revenue suffered a 3% year-over-year decline in 2020 due to lower NII and non-interest income. This development was driven by headwinds on interest rates, lower levels of consumer spending and lower outstanding loans. That said, the economy has seen some recovery in the first three quarters of 2021. The company reported an 11% year-over-year increase in nine-month cumulative revenue to $9.15 billion. We expect the same trend to continue in the fourth quarter, allowing Discover the earnings of Financial to touch $12.1 billion in fiscal 2021. In addition, the adjusted net profit margin is expected to increase from 10% to nearly 43% in fiscal year, primarily due to a favorable decrease in provisions for credit losses. It should result in an adjusted net profit of $5.2 billion and an EPS figure of $18.01. This, coupled with a P/E multiple just above 7x, will lead to a valuation of $134.

Below is our previous Discover Financial stock coverage where you can follow our view over time.

[Updated 11/11/2021] Is the price of Discover Financial Stock reasonable?

Discover the financial action (NYSE: DFS), the credit card giant, has gained 30% year-to-date, rising from its value of $91 at the start of 2020 to around $117 currently, outperforming the S&P500, which has risen by 24% over the same period. Additionally, the company’s net interest income and discount and interchange fees for the first nine months of 2021 improved 3% and 27% year-over-year, respectively.

There were two clear reasons for this: First, the easing of travel bans and Covid-19 restrictions benefited consumer spending levels. Second, favorable financing costs.

But we believe there are more benefits to come over the next few months.

Trefis estimates Discover the valuation of Financial at around $134 per share – around 14% above the current market price – based on a key opportunity and risk factor.

The opportunity we see is Discover Financial’s revenue growth in subsequent quarters. The company generates more than 90% of its total revenue from the direct banking segment. Nearly 85% of the share comes from NII. The NII suffered a decline of 2% year-on-year in 2020, due to lower outstanding loans and interest rate headwinds. In addition, non-interest revenue decreased 7% year-on-year due to lower discounts and interchange fees. That limited the company’s revenue to $11.1 billion in 2020, down 3% year-over-year. That said, the pattern has changed in fiscal 2021. The company recently released its third quarter results, beating consensus estimates for revenue and profit. It posted total revenue of $2.8 billion, up 2% year-on-year, driven by 6% growth in NII and a 26% increase in discount and interchange fees. Notably, turnover was partially offset by -$167 million of unrealized gains/(losses) on equity investments. Overall, the NII and discount and interchange fees both saw some improvement in the first three quarters of fiscal 2021. The cumulative NII for the first nine months improved by 3 % year-on-year, mainly due to favorable financing costs due to lower market rates and lower interest charges. Additionally, discount and interchange fees increased 27% year-on-year over the same period, primarily due to higher transaction volumes.

Going forward, we expect the same trend to continue in the final quarter of fiscal 2021. Overall, this will likely drive Discover Financial’s revenue to $12.1 billion over the course of the year. fiscal year 2021. Our dashboard on Discover Financial Revenues offers more detail on company segments.

Discover Financial’s profitability numbers suffered in 2020 due to large provisions for credit losses and higher expenses as a % of revenue. However, the company reduced its provisions figure in 2021, due to the improvement in the repayment capacity of its customers’ loans. Overall, the adjusted net profit margin is expected to increase from 10% to approximately 43% over the course of the year, generating net income of $5.2 billion. This will likely translate to EPS of $18.01, which, coupled with the P/E multiple just below 8x, will lead to a valuation of around $134.

Finally, how much should the market pay for every dollar of profit from Discover Financial? Well, to earn nearly $18.01 a year from a bank, you would need to deposit about $1,801 in a savings account today, or about 100 times your desired earnings. At the current Discover Financial stock price of around $117, we are talking about a P/E multiple of just below 7x. And we think a figure closer to 8x is appropriate.

That said, credit card issuance and electronic payment solutions currently appear to be a risky business. Growth looks less promising and the short-term outlook is far from rosy. What’s behind that?

Discover Financial is highly dependent on net interest income and consumer spending levels. While the NII has seen some recovery due to lower funding costs, the company has seen stagnant growth in outstanding loan balances. This has limited NII’s growth potential in the near term. Additionally, consumer spending levels have improved in recent quarters. However, any sudden increase in the number of Covid cases or worsening economic conditions may adversely affect the current trend. In summary, we think Discover Financial stock is undervalued.

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Return Jan 2022

MTD [1] 2022

YTD [1] 2017-22

Total [2] Yield DSF 3% 3% 54% Return of the S&P 500 0% 0% 79% Return of the MS Trefis portfolio 0% 0% 292% [1] Monthly and year-to-date cumulative as of 4/1/2022

[2] Cumulative total returns since 2017

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Does Voya Financial Stock deserve a place in your portfolio? https://purpleribbonproject.com/does-voya-financial-stock-deserve-a-place-in-your-portfolio/ Thu, 30 Dec 2021 15:34:23 +0000 https://purpleribbonproject.com/does-voya-financial-stock-deserve-a-place-in-your-portfolio/ Voya Financial Pension, Investment and Insurance Company, Inc. (VOYA), which is based in New York, operates through three segments: Retirement; Investment management; and social benefits. The company has an ISS Governance QualityScore of 2, indicating a relatively low governance risk. On December 21, the S&P Dow Jones Indices announced that VOYA will be added to […]]]>


Voya Financial Pension, Investment and Insurance Company, Inc. (VOYA), which is based in New York, operates through three segments: Retirement; Investment management; and social benefits. The company has an ISS Governance QualityScore of 2, indicating a relatively low governance risk.

On December 21, the S&P Dow Jones Indices announced that VOYA will be added to the S&P 500 Midcap 400 Index before the market opens on December 28, 2021.

The stock has gained 8.7% since this news broke to close yesterday’s trading session at $ 66.46.

Here is what could shape VOYA’s performance in the short term:

Ambitious financial goals

VOYA aims to achieve an adjusted EPS growth rate of 12-17% per year through 2024. The company plans to fuel its bottom line growth through expanding margins, capital management and growth in profitability. net income. It plans to achieve a 90-100% free cash flow conversion over the next three years and achieve an operating ROE in the range of 14-16%.

In this regard, VOYA President and CEO Rodney O. Martin, Jr. said: “Our significant financial, operational and cultural transformation has enabled Voya to become a company focused on health, wealth and investment. , clearly focused on service to the workplace and institutions. . Voya is now poised to drive further success by providing valuable solutions focused on the growing needs of our clients and clients. “

Mixed growth prospects

Analysts expect VOYA’s revenue to increase slightly in the current quarter (end of December 2021) and 2.5% in the next quarter, but to decline 1.8% next year. However, consensus estimates of EPS show a drop of 24.7% in the current quarter, a fall of 17.6% in the following quarter, and a decline of 15.9% in 2022.

Lower rating than industry

In terms of a non-GAAP forward P / E, VOYA is currently trading at 0.37x, 26.3% lower than the industry average of 11.35x. The stock’s non-GAAP PEG forward multiple of 0.29 is 71.5% lower than the industry average of 1.03.

Additionally, VOYA and EV’s forward price / sales ratios of 1.15 and 1.94, respectively, compare to industry averages of 3.39 and 2.88. In addition, the stock’s forward EV / EBIT multiple of 9.43 is 20.2% lower than the industry average of 11.81.

Consensus rating and price target indicate upside potential

Of the five Wall Street analysts who rated VOYA, four rated it Buy while one rated it Hold. The median 12-month price target of $ 77.20 indicates a 16.2% upside potential from yesterday’s closing price of $ 66.46. Price targets range from a low of $ 75.00 to a high of $ 79.00.

POWR ratings reflect uncertainty

VOYA has an overall rating of C, which equates to Neutral in our property POWR odds system. POWR scores are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.

VOYA has a C rating for growth and quality. The company’s revenues have declined at a rate of 19.1% per year for the past three years. However, its EBITDA grew at a CAGR of 46.6% over this period, justifying the growth note. Additionally, VOYA’s 12-month rolling 12-month net profit margin is 46.8% above the industry average of 29.95%. However, the last 12 months of the company leveraged free cash flow the margin is negative, which is in line with the level of quality.

Of the 53 C-rated stocks Asset Management industry, VOYA is ranked # 47.

In addition to the ratings I highlighted, check out the VOYA ratings for momentum, sentiment, stability and value. here.

Final result

Rising employment rates and wages against the backdrop of the global economic recovery will likely stimulate demand for VOYA’s service offerings in the coming months. Analysts expect the company’s revenue to increase over the next year. However, the company’s low cash flow is a cause for concern. In the past 12 months, VOYA’s net revenues were $ 4.50 billion, while its net operating cash flow was $ 353 million. In addition, the company’s leveraged free cash outflow was $ 3.52 billion. Against this backdrop, we believe investors should wait until VOYA’s cash flow improves before investing in the stock.

How does Voya Financial, Inc. (VOYA) compare to its peers?

Although VOYA has a C rating in our proprietary rating system, one might consider looking at its industry peers, Silvercrest Asset Management Group Inc. (SAMG), Gamco Investors, Inc. (GBL) and Diamond Hill Investment Group, Inc. (DHIL), which have an A rating (strong buy).


VOYA stock was trading at $ 66.70 per share on Thursday morning, up $ 0.24 (+ 0.36%). Year-to-date, VOYA has gained 14.65%, compared to 29.78% for the benchmark S&P 500 during the same period.

About the Author: Aditi Ganguly

Aditi is a seasoned content developer and financial writer who is passionate about helping investors understand the dos and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach to stock analysis. Following…

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