Borderline Penny - Potentially Huge payoff

[MrBad]

I thought I would call attention to this stock, although it is not considered a penny stock now, but I bought it under 2.00...and it is trading around that range now.

RAS is a real estate invesment trust that took a huge hit in 2007 from the bankruptcy of AHM. Since then, they have reorganized their business model and have been pretty solid in putting out positive earnings and .... best of alll.... they HAVE NOT suspended their dividend. Last Quarter's divy was 0.35/share and 1st quarter 2009 is about to be announced.

The play would be to keep an eye on it. IF they announce a divy of 0.35 or more in the next week, this stock will take off....AND you could probably still get in time to collect on the divy.

I got in because the share price was near the 52 week low and they have had solid earnings through one of the most horrible years in market history while their competition has been falling like lead in water (check SFI, MPG and etc).

It has some risks... and the shorts are betting against them (15% of float is short). However, with that type of short position, a successful earnings and divy announcement will rocket this stock.


This is not a buy recommendation... just keep an eye out.

Good Luck!

[XOM]

A 66% dividend yield is interesting, especially from a company in the red. Where does the money come from?

[MrBad]

To obtain a REIT status (which basically means they do not have to pay income tax to the government) they are required to pay 90% of their earnings to the shareholders as dividends. They take their income from the other 10% - tax free.

[XOM]

Okay, thanks for the explanation.

[JLW99]

Definitely interesting to watch. These small REIT's can really move when the sector is flying. RAS is also a component of the IYR index (about 0.08% of the index). I've noticed that days when IYR or SRS are really moving the lower weighted stocks on the index like RAS can swing 30% either direction.

[MrBad]

That's true. MPG has been moving like that recently. Huge change in pps in both directions the last week there. When all is said and done, and the financial dust settles, reit's will be the stocks to be in on. They pay out huge divy's. There is nothing better than getting in on a large divy stock at historically low share prices. You basically get paid to hold a stock while it increases in value..... in this case increases of tenfold or more will be possible in the future.

There are a variety of reits. I'd be checking out some good ones now while the getting is good.