Trust in Capital Trust?
I discovered another interesting stock today called Capital Trust (NYSE: CT). It’s a REIT (Real Estate Investment Trust) with a lot of money in CDO’s. Whenever I think of CDO’s, I think of write-downs, increased allowances for future losses, and charge offs — all very bad things.
However, on the bright side, CT has a book value of almost $15 and claims to have enough liquidity to get through most of their short term financing needs according to their latest 10-Q. So there’s less of a “Going Concern” risk with CT.
I bought in today at $2.82 because I feel their existing management team is strong and should be able to weather the storm. Nevertheless, the one factor that pushed me over the edge in deciding to go long on CT was the market cap – it stands at a mere $63 million. If they can avoid bankruptcy, which would be likely if the real estate market stabilizes, I believe Capital Trust should be a very solid investment.
Weekly Recap – Long Positions in my Active Trading Portfolio ending 8/28/2009:
E*Trade (NASDAQ: ETFC)
Bank of America (NYSE: BAC)
Citibank (NYSE: C)
Las Vegas Sands (NYSE: LVS)
MGM Mirage (NYSE: MGM)
Alliance Semiconductor (OTC: ALSC)
E-House Holdings (NYSE: EJ)
Banco Popular (NASDAQ: BPOP)
CIT Group Preferred A (NYSE: CIT-PA)
Saks Stores (NYSE: SKS)
Key Corp (NYSE: KEY)
Regions Financial (NYSE: RF)
Capital Trust (NYSE: CT)
