Comments on: Stock Analysis: ProLogis (PLD) Priced for a Buy?

By: Anonymous

Anonymous — Thu, 23 Oct 2008 15:20:00 +0000

WOW What a deal on PLD this morning, 11.75 was the low…So do you think its a deal now after your analysis less than a month ago….

Better to stay with your day job…

By: Richard Woon

Richard Woon — Thu, 02 Oct 2008 04:57:00 +0000

I actually have no ties to the company but I’m a commercial real estate attorney in the Silicon Valley. Trust me, the commercial market is horrible and getting worse.

Right now, levered free cash flows for PLD are -$780M. That’s right – NEGATIVE. Further, PLD did the same thing home speculators did – refinance, refinance, refinance.

I wouldn’t touch the common stock. The preferred might be ok – the yield is much higher but I just get a bad feeling about the company in general.

I have about 15 posts on my blog about ProLogis – please give me your comments.

By: Dividends4Life

Dividends4Life — Wed, 01 Oct 2008 23:39:00 +0000

Jake: It appears to be a promising stock. I am still looking at it.

Richard: You bring up an important issue of debt and the ability to service it. If you look at the last 10-years (98-07), free cash flow as a percent of total debt averaged 14.6%. 2007 ended at 11.7%, up from 2005 (7.5%) and 2006 (8.6%).

I am still learning about the company. Do you anticipate a future decline in fcf that would make servicing the debt problematic?

You seem knowledgeable about the company. What is your relationship to it?

Best Wishes,
D4L

By: Anonymous

Anonymous — Wed, 01 Oct 2008 23:28:00 +0000

If the economy does slow down, wouldn’t it seam reasonable the industrial space would not be in as much demand?

By: Richard Woon

Richard Woon — Wed, 01 Oct 2008 22:53:00 +0000

I like you blog but I respectfully disagree as I believe that you have focused on the income side but not the debt. This company is way overleveraged. I think it will end up like Lehman, Bear etc.

I’ve done a comprehensive analysis of ProLogis at my blog:

http://www.stripnomics.com

I would love to get your take, good or bad.

By: Jake (Dividend Blog)

Jake (Dividend Blog) — Wed, 01 Oct 2008 11:48:00 +0000

Hey D4L,

I have owned Prologis for a long time. The stock price has pulled back over the last six months which provides for a great buying opportunity. They are growing internationally in order to spread risk. Good call.

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