David Taylor

Real estate in China has taken a hit over the past several years.  This stock has also seen the same kind of damage selling off over the past several years.  Now, however, the company’s stock has stabilized along with the earnings and the real estate market in China.  

But, this company primarily focuses its ventures in Hong Kong and has largely been immune to the epic building that has happened in mainland China.  Instead, Hong Kong’s real estate market, which has come off of its highs prior to the financial collapse, the market has stabilized and economic activity has been expanding again.  

Terra Firma Capital Corp. (TFCCF) is a Canadian real estate finance company.  The company specializes in bridge loans for developers and home-owners doing construction.  The company’s market capitalization is $35 million and the stock is trading at $0.489 per share, making this effectively a penny stock.  

China New Borun Corporation (New Borun) (BORN) produces edible alcohol products.  The company also produces crude corn oil and other alcohol by-products.  The company has a market capitalization of $32 million, so is smallish.  Their stock is traded at $1.27 per share.  

The EPS ratio and the company’s earnings are what caught my eye.

Commonwealth Bank of Australia provides retail banking and financial services to personal, business and institutional clients.  The company has a market capitalization of $36 billion and a share price of $63.02.  

The bank is profitable.  In fact, it has very strong earnings, however they have been declining of late.  

PDL BioPharma is an interesting company.  They really do not make anything.  Instead, the finance patents within the pharma industry, providing financial monetization of royalty streams to companies and academic institutions.  Their market capitalization is $365 million and the stock is trading at $2.20 per share.  

Basically, what the company does is it finds patents that an institution or company has filed and then PDLI monetizes that patent.  Then, the company licenses the patent out taking in a spread between what the company pays to the patent holder and the fees collected by companies using the patent.  They are a middleman for the pharma patent industry.  

I have been very bullish on real estate for some time.  Think of all of the money that was printed by the central banks around the world.  That was inflationary and the one thing that happens during inflationary times is that asset prices increase.  Real estate will be going up in price and there is already indications that home affordability is at near-record lows.  This is because there has not been any real development over the past many years after the real estate bubble from 2008.  Too many investors got their fingers singed from that and investment in development waned considerably.  Now, the players are back in building at decent levels.  But, the supply has not necessarily been able to keep up with demand.  

Saratoga Investment Corp. is a specialty finance company. The Company is an externally managed, closed-end, non-diversified management investment company. The Company invests primarily in leveraged loans and mezzanine debt issued by private middle-market companies in the United States.  The company is traded in the United States under SAR.  Its market capitalization is $122 million and its stock is traded at $21.75.  The objective of this fund is to earn income through the debt payments.  To a lesser extent, they company does try and earn capital appreciation, however, that is a smaller portion of the company’s focus.  

UOL Group is a property and development company.  The company focuses on management of properties in the hotel management industry.  They are mostly located in Singapore and Hong Kong.  

Property has been declining in China and Singapore of late.  But, that trend is likely to wane since the economy in the United States is improving as it is.  Keep in mind that China is the manufacturing capitol of the world.  As the economy in the United States improves, so will the economy of China, which has already shown signs of strong growth over the past two quarters.  Plus, the economy of Singapore has been improving even more during the same period.  This will allow UOL to increase its revenues and earnings, shown here, respectively:

Arlington Asset Investment Corp is an investment firm that has a portfolio of Mortgage Backed Securities (MBS).  They have agency and private securities.  They also hold real estate investments via a REIT.  

MBS were the instruments that created the financial meltdown of 2008 and the subsequent Great Recession.  These instruments were riddled with bad investments, false reporting and a hierarchy that even today no one really understands.  And, yet, there is potential in AI.