• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Real Estate

3 Investment Ideas That Sadly Didn't Follow My Script

Ruby Tuesday wasn't much of a "best idea for 2017," a post-merger Farmland Partners has laid fallow and avoiding Equifax after its data breach haircut was a mistake.
By JONATHAN HELLER
Dec 18, 2017 | 12:00 PM EST
Stocks quotes in this article: RT, FPI, EFX

A part of growing and learning as an investor is to admit your mistakes. I know of one well-known manager who used to keep a display of stock certificates outside his office that included his ideas that did not work. He could not enter his office without seeing them; they were a constant reminder of what went wrong.

I've certainly made my share of mistakes, and started off 2017 with a doozy. That's what you sometimes get when the bosses ask a deep-value investor for his best idea for the coming year. I knew it was ugly when I wrote it; I knew that most would cringe, and I was at least right about that. Late last December, I named Ruby Tuesday (RT) as my best idea for 2017. It was not because I thought that the struggling chain would turn around its restaurant operations completely; it had tried nearly everything through the years to do so, including menu changes, remodeling, promotions, you name it. I thought it could show some improvement in the numbers, however small. I also believed that no matter what, shares were cheap from an asset perspective, specifically company-owned real estate. I thought that perhaps the markets were undervaluing the total package and that the real estate might be appealing to someone. I thought the stock potentially could double over the year, from the $3.20 level where it was trading at the time.

Ruby Tuesday's restaurant operations did not improve all that much over the year. However, an acquirer, NRD Capital, stepped forward in October and offered $2.40 a share, which represented a 21% premium to the price at that time. That disappointing offer, which was accepted by the company, was 25% less than when my column ran.

The lesson here is that assets of a distressed company may fetch distressed prices; in this case, beggars could not be choosers, and Ruby Tuesday accepted the low-ball offer because it may have believed it did not have much of a choice. I've been known to become too enamored with real estate assets, and in this case, it did not pay off.

I thought the merger between Farmland Partners Inc. (FPI) and American Farmland, which closed in early February and formed the largest publicly traded farmland REIT, would be a positive. While I consider this a long-term holding and am reinvesting the ample 5.4% dividend, shares are down about 13% since the merger closed. While American Farmland added some higher-quality land and crops to the mix, investors have remained skeptical about the company's ability to maintain the dividend. While I am not ready to declare this a total mistake and am maintaining a position, it simply has not worked well this year due in part to my own unrealistic expectations.

Back in October, I wrote about avoiding Equifax Inc. (EFX) shares in the wake of the infamous data breach that may have affected millions. Shares endured a 35% haircut from Sept. 7 to Sept. 15 as the data breach news was front and center, but had recovered somewhat when my column ran. I thought the fallout would get worse; however, shares have recovered another 10% since then, and the data breach is now yesterday's news. I still don't want to own this name, but the market appears to be thinking otherwise.

These are just three examples where the George Costanza method of doing the opposite -- featured in one of my all-time favorite "Seinfeld" episodes -- would have paid off. Still, if you are going to enjoy your investment triumphs, it is healthy to acknowledge the miscues.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller was long FPI.

TAGS: Investing | U.S. Equity | Industrials | Consumer Staples | Technology | Real Estate | How-to | Mergers and Acquisitions | Stocks

More from Real Estate

This Opendoor Trade Is in Move-In Condition

Timothy Collins
Apr 1, 2021 2:12 PM EDT

With this call spread opportunity, traders can maximize the push seen in the technicals.

Zillow Enters Greater Fool Territory

Ed Ponsi
Feb 11, 2021 10:45 AM EST

I can name this tune in three notes, and if you were a homeowner or real estate investor 15 years ago, you probably can as well.

Migration Trends the Pandemic Triggered Won't End Soon

Bret Jensen
Feb 3, 2021 8:42 AM EST

The exodus of residents from big cities and the reduced demand for office space are unlikely to reverse for some time.

Debt-Laden Chinese Electric Car Company Shares Soar

Alex Frew McMillan
Jan 25, 2021 7:00 AM EST

Property developer China Evergrande has seen shares in its electric car unit skyrocket before it enters commercial production.

Jim Cramer: You Just Won Powerball, Now What?

Jim Cramer
Jan 21, 2021 2:24 PM EST

Remember, you only need to get rich once.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login