Recent (Risky) Buy: American Realty Capital Properties, Inc.

ARCP has been on my extended watch list for a while. So far I’ve focused on much more conservative companies in the REIT sector and have invested in companies such as Realty Income Corporation (0) and Omega Healthcare Investors, Inc (OHI). Considering the accounting issues ARCP announced yesterday, I really can’t regret that choice. That being said, on October 29th I bought 90 shares of ARCP for 8,20 USD per share.

This is somewhat a risky play here but the position is very small or even insignificant. It’s hard to say if their current dividend is safe or not but according to the current information it might be. In such case this would provide a very, very generous yield on cost. On the other hand the company could be buried with lawsuits and eventually go out of business. In such case I would still get something to deduct in taxes. In that sense this is not that risky move after all. Yesterday I saw the stock closing +20.79% above my purchase price and at the time writing this, it’s down -5.70% from previous close. In near future this will provide plenty of turbulence but all in all, I feel that the issues they are having are not bad enough to justify the -35% hit they were taking yesterday.

Reference:

ARCP Analyst/Shareholder Conference Call Transcript