added more of HOT.UN I added another small chunch at current levels this past week.
I was on the conference call and feel pretty good about what is happening here. At least, I understand the cards, players and risks that are on the table.
1) The economy lodge group is sold effective end of month September.
2) Management is reviewing one off and group premium buy opportunities
3) There is going to be a gap between the sale and new revenue coming online which will impact the payout ratio but the company will use cash or debt to keep payments flowing. This means they are confident in the opportunity pipeline and their ability to quickly integrate new properties into their systems and ramp them.
4) Fundamentally, they seen to be doing better the hotels they are renovating and adding food sales, etc.
If they can make it through till the end of the year then they should be fine. I was concerned about this one but they have a clear plan that I can understand and invest accordingly. The risk here is execution.
Based on insider ongoing buying over the past 12 months they are highly confident that this will rock n roll. This should get back up to $8+ / share over the next 12 months if they execute as they indicate.
Anyone buying now is locking in 12% yield with some level of execution risk.
High level - Under Trumph's government the USA economy is absolutely roaring so I dont see any shortage of travel.
Let's see what happens in the next 90 days which will be telling.
Out.