Opinions

Dennis Mitchell, CFA Royal Host Inc RYL-T DON'T BUY Aug 16, 2007

Limited service hotels. Big exposure to Western Canada. Sort of in wrap up mode. Sold off the timeshare management and hotel management businesses, so what you are left with is a portfolio of older hotels. Their saving grace is they are based in Western Canada.

Dennis Mitchell, CFA

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$6.850

Stock price when the opinion was issued

merchandising lodging

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TRADE

Will become a leveraged play that generates cash flow from a fixed portfolio of real estate, but is used to do other things. Wouldn’t recommend it at these levels as a REIT. As an investment, it has a secure portfolio.

DON'T BUY

Limited service hotels with big exposure to Western Canada. An older REIT so assets are also older, which is usually the kiss of death for limited service hotels. Also some concerns about management. Have been selling assets and reinvesting into other REIT stocks. Expecting them to report a big loss in Q3.

DON'T BUY

Micro-cap REIT in the hotel sector. Not a fan of hotels right now. Large special distribution at year-end because of some gains on properties sold.

SELL

(Market Call Minute.) A little bit leery of the hotel sector right now.

HOLD

(Market Call Minute.) They're going to get rid of it somehow.

SELL

Limited service hotels with big exposure to Western Canada. Will be affected by tourism. Expect it will be a 2 to 4 year turnaround for limited service hotels. Feels distribution is in serious jeopardy.

COMMENT

(Market Call Minute.) If it dropped back to $2.10 he would be a Seller or a Holder.

DON'T BUY

Hotels. Yield of about 24%. Have a fair amount of capital. Doesn't look like they want to manage the hotel business. High yield but he questions if they are earning it.

SELL

Thinks this is going to be converted back to a Corp. Not a healthy entity. If you own, try to get your liquidity out and go somewhere else.

DON'T BUY

Apartments, badly messed up. He doesn’t look at it any more. Badly focused. None of the brokers cover it.

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Dennis Mitchell, CFA Royal Host Inc RYL-T DON'T BUY Aug 16, 2007

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