American Campus Communities & the Crooked Analysts
Since the ACC earnings release and conference call, the analysts took the following actions with respect to ACC’s ratings:
- S&P: Kept their “Strong Buy” recommendation
- Citigroup: Raised to “Hold” from “Sell”
- KeyBanc Capital Markets: Reiterated “Buy”
As you can see, these were all positive ratings changes or reiterations for the stock. Take my word for it when I tell you that there is NO REASONABLE BASIS for any rating other than SELL. The report was horrible and it is obvious that things are getting tougher for the clueless management team at ACC.
In the end, the ratings will not matter. The invisible hand is smarter and stronger. However, when ACC is trading on the pink sheets, I hope there will be investigations into these actions. Someone should investigate these agencies and any LENDING RELATIONSHIPS with ACC. If someone digs just a bit, I believe there will be enough for indictments. That’s just my humble opinion.
I should mention that Morningstar lowered their fair value estimate for ACC. Clink HERE for the full article.
February 24th, 2009 at 2:34 pm
\Still we believe this substantial acquisition–which nearly doubled the size of the company to 48,000 beds from 25,000 beds–generates opportunity for American Campus as the GMH portfolio is only 88% occupied compared with the rest of American Campus’s portfolio at 96% occupancy. Finally, we think both on-campus and off-campus housing should fare better than standard apartments over the next few years because of the countercyclical nature of education, which generates demand for residences near college campuses.\
February 24th, 2009 at 6:35 pm
So I guess you have to ask yourself whether this is a real estate play or a education play? I say it’s a real estate play disguised as an education play. I do agree that student housing will remain in high demand - the problem is the margins that ACC will have to maintain given the prices they paid for the properties. Management paid way too much!
February 25th, 2009 at 10:18 am
[...] At The Tinker Factory, we view American Campus Communities (ACC) as one of many candidates that will trade to zero. Yesterday, ACC rallied along with the rest of the market. It rallied right to the resistance level I have my eye on. For more detailed research on this name, see Stripnomics. [...]
February 25th, 2009 at 2:26 pm
Any thoughts on what the impact of availabilty to new lines of credit/loans from Fannie or Freddie will be on names like ACC, ARE, HCP? Won’t that help them buy time and avoid default/bk that would likely occur if they had to go to non-governmental back lenders that won’t touch them?