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Tale Of The Tape - YTD
ATAX - Business Model/Portfolio
As of Dec. 31, 2014 ATAX owned 35 tax-exempt mortgage revenue bonds and 1 taxable mortgage revenue bond. The revenue bonds were issued by state and local issuing authorities to provide for permanent financing of multifamily residential property and one student housing property, totaling 3,313 rental units, located in 13 states.The Fund also owns 8 additional properties comprising 2,163 units which provide additional income to the Partnership in the form of property net operating income and are located in the states Georgia, Indiana, Kentucky, Texas, Kansas and Nebraska.How Does ATAX Compare?
There doesn't appear to be a direct comparison available for the ATAX business model. In some respects ATAX is similar to a high-yield mREIT, and yet in other respects it has features similar to a closed-end municipal bond fund.FREE REPORT: How To Learn Options Trading Fast
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Oppenheimer - ATAX: Outperform Rating, $6.50 PT
The Oppenheimer $6.50 price target represents a potential 16.5 percent upside from the recent close of $5.58 per share.Oppenheimer derived its price target by taking into account the current 2 percent 10-Yr Treasury note environment, and viewing ATAX's risk-adjusted dividend yield to be in the range of 7 to 8.5 percent."In light of the company's use of leverage, liquidity and need to fully lever up capital, [Oppenheimer] believe[s] a premium yield relative to Treasuries is justified. With the annualized dividend currently at $0.50, this implies a share price of $6.50."Oppenheimer - Q1 Earnings Takeaways/Risk Factors
- Q1 Revenue: - $0.09 per share came in light vs. Oppenheimer $0.11estimate, due to higher G&A expenses.
- FY 2015E: Oppenheimer is reducing its EPS estimate from $0.48 to $0.43 per share; however, remains bullish on ATAX due to higher expenses being related to its growing deal pipeline.
- CAD vs. Dividend: To the extent that ATAX quarterly earnings may be below cash available for distribution (CAD), the payment of declared dividends may reduce book value per share.
- Funding Sources: ATAX currently relies on an "attractive financing vehicle" from Deutsche Bank, which currently result in a ~4 percent interest rate spread; however, ATAX also uses a derivative strategy to cap its rate risk.
- Equity vs. Funding: The faster ATAX is able to securitize construction and rehab projects, the less equity/spread risk for the company.
Investor Takeaway
ATAX has been able to maintain a consistent quarterly dividend of $0.125 since 2009. Notably, the company has a history of generating additional income most quarters through the sale of properties and/or bond issues.ATAX is a partnership which issues K-1's to unit holders which designate the treatment of dividends for tax purposes. Investors should always consult a tax professional or investment advisor regarding the suitability of any investment.Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.