Sunday, March 13, 2016

Seeking Alpha: Sluggish Investments And Changing Markets Have Hammered FTAI

Back in the summer of 2015, Fortress Transportation and Infrastructure (NYSE:FTAI) looked like an interesting new opportunity in the infrastructure investment space to go alongside more established names like Brookfield Asset Management (NYSE:BAM) and Macquarie Infrastructure (NYSE:MIC). Although there was the noted risk of the difficulty of making cash flow projections based on little more than uncommitted capital and management intentions, there appeared to be attractive opportunities in areas like aviation leasing, port development, and terminal operations.

Unfortunately, those initial projections proved much too generous, and the shares have lost about 40% of their value. Management has moved much slower than I'd anticipated in investing/deploying capital, and the company has seen sentiment around terminal operations shift dramatically in the wake of the severe drop in oil prices and the subsequent slowdown in U.S. onshore production. Now the company finds itself in a position where the distributable funds generated from operations may not fund its dividend in 2016 unless those investments accelerate.

I understand why the market has turned on this name, and I can certainly appreciate less risk-tolerant investors taking the position that this is untouchable until the company makes some meaningful use of that nearly $900 million in investable funds. That said, for more aggressive investors, this could still be an interesting opportunity with both a capital gains and income aspect.

Continue here:
Sluggish Investments And Changing Markets Have Hammered FTAI

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