I love learning about new things. It was kind of a slow earnings day yesterday, but I am glad I took a peek at Forest City Enterprises
Forest City is a real estate operating company (REOC). It operates a diversified real estate portfolio and is made up of three businesses: the commercial group, the residential group, and the land development group (see its website for details). It differs from a real estate investment trust (REIT) in that it keeps the earnings to reinvest rather than paying them out to shareholders. That's good as long as management can allocate capital well. And according to the press release, management seems to be doing just that.
Quarterly per-share earnings before depreciation, amortization, and deferred taxes (EBDT, because EBDADT would just be silly) rose 18% year over year, while consolidated revenues increased 8.5%. Revenues mainly consist of lease payments, and the growth was primarily due to a number of new projects and some acquisitions in 2003 and 2004. Makes sense -- the more properties you develop and rent out, the more revenue you create, especially when the tenants are companies such as Home Depot
But the most curious thing was who owns shares: Mason Hawkins, Wally Weitz, Marty Whitman, and Markel
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Fool contributor David Meier does not own shares in any of the companies mentioned.