FelCor Flops: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Hotel REIT FelCor Lodging Trust (NYS: FCH) got evicted from 10% of its market cap Tuesday.

So what: It was a humbling result for a company that bills itself as the operator of "upper-upscale" hotels and resorts. Seems investors were less than impressed with FelCor's ballyhooed 6.2% increase in revenue per available room and totally unimpressed by the company's $42 million net loss for the quarter.

Now what: They'd better get used to it, though. Management predicts that its hotels will continue growing RevPAR in the 6% to 7.5% range for the rest of this year and continue losing money, to boot. Total losses for the year: now anywhere from $115 million to $121 million.

The company is growing revenues more slowly than just about any of its peer hoteliers, losing more money than most, and doesn't even pay a dividend -- which is kind of curious for a REIT. Maybe there's a reason to own it, but if there is one, I must say it escapes me.

Think there's hope for this stock?Add the stock to your Fool Watchlistand find out.

At the time thisarticle was published Fool contributorRich Smithdoes not own (or short) shares of FelCor Lodging Trust. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

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