Work hard, play hard and this company is well positioned to take advantage of that

Drive Shack is a holding company that deals with purchasing and managing golf courses.  It was just recently that this company switched its focus to the leisure activity of golf.  The company’s properties are mainly found in and around the south and the East Coast.  The stock is trading at roughly $4.42 per share and the market capitalization is roughly $243 million.

I have been very bullish on two sectors of late; banking and real estate.  You see, the economy in the United States is improving from the financial conundrum it has been in over the past several years.  Unemployment has been at near record lows and personal incomes for Americans are growing at moderate rates. 

Published over a year ago
View all stories for Drive Shack | View All Stories
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Raphi Shpitalnik

With the economy expanding incomes are increasing along with spending.  The central banks around the world printing vast sums of money as they did, that money is now starting to show up in price indexes.  Increases in prices mean increases in asset prices.  At the same time, this company is in a unique duality of being invested in not only real estate but leisure real estate.  All the hard work individuals have been doing will translate into hard playtime.  

We determine the current worth of Drive Shack using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Drive Shack based exclusively on its fundamental and basic technical indicators. By analyzing Drive Shack's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Drive Shack's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Drive Shack. We calculate exposure to Drive Shack's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Drive Shack's related companies.

Watch out for price decline

Please consider monitoring Drive Shack on a daily basis if you are holding a position in it. Drive Shack is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Drive Shack stock to be traded above the $1 level to remain listed. If Drive Shack stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

Drive Shack Investment Alerts

Drive investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Drive Shack performance across your portfolios.Please check all investment alerts for Drive

Drive Shack Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Drive value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Drive Shack competition to find correlations between indicators driving the intrinsic value of Drive.

Another Deeper Perspective

Drive Shack is a holding company that deals with purchasing and managing golf courses.  It was just recently that this company switched its focus to the leisure activity of golf.  The company’s properties are mainly found in and around the south and the East Coast.  The stock is trading at roughly $4.42 per share and the market capitalization is roughly $243 million.

I have been very bullish on two sectors of late; banking and real estate.  You see, the economy in the United States is improving from the financial conundrum it has been in over the past several years.  Unemployment has been at near record lows and personal incomes for Americans are growing at moderate rates.  

During the financial crisis, the Federal Reserve took unique steps to strengthen the economy.  The Fed expanded the money supply by some $4 trillion.  This was a massive effort to reign in the drop in growth of the economy.  Now, the economy is in far better shape.  But, all that money that was created will translate into asset prices moving up.  If you are bullish on real estate, REITs are a great way to get involved.  

This particular company has done a solid job of creating investor wealth.  The company has switched gears over the past several years to gear up for the asset price moves that it perceives will take place.  Here are some key figures for DS with assets, liabilities and debt, respectively:

2012:  $3,945 / $2,872 / $2,954

2013:  $4,838 / $3,612 / $3,018

2014:  $1,762 / $1,504 / $1,315

2015:  $1,468 / $1,258 /    $971

The company realigned its focus the past several years which is the reason there was a drop in assets and liabilities from 2013 - 2014.  Since then, DS has seen its asset to earnings ratio improve.  The company’s focus has been providing results.  

Other key financial numbers are the gross income and earnings-per-share:

2012:  $538,058 / $17.84

2013:  $210,590 /   $3.16

2014:  $340,892 /   $0.45

2015:  $353,696 /   $0.24

Revenue has been increasing.  But, there was a drop in income from the past two years.  However, since then the company has been able to improve its earnings; DS is slated to finish 2016 with earnings of $0.44 per share.  That puts the stock on a 10-earnings ratio.  And, it also means that the company is increasing its ability to earn more income with what assets it has to work with.  

With the economy improving like it is, real estate is going to be an excellent investment.  And, with the money creation that happened from the past several years via the Fed, real estate has the ability to improve strongly.  Like I mentioned before, I am bullish on real estate.  It is going up.  Getting involved in a real estate company would be a strong move for your portfolio.  

The economics of real estate make a great deal of sense.  Keep in mind the massive amounts of money that a was printed by central banks around the world to shore up respective economies.  We are beginning to see the results of these efforts to in increased economic activity.  And, we are beginning to see an impact of all of this money existing in the price indexes; Consumer Prices are increasing and have breached the 2% levels.  

All of that money that was printed is going to end up pushing up asset prices.  That is why I have been so bullish for so long on real estate.  Finally, we are beginning to see the results of this from an economic perspective and we will also be able to see the results of this via companies earnings.  DS is one of the companies that is well positioned to achieve these goals. 

Building efficient market-beating portfolios requires time, education, and a lot of computing power!

The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.

Try AI Portfolio Architect

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and David Taylor do not own shares of Drive Shack. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com