The buy thesis for MHI Hospitality (MDH) is both simple and powerful: if it can meet or beat its guidance for 2013, it will massively outperform the market. Guided FFO per share of $0.55-$0.72 would represent a price/FFO of 5.10-6.67. As such, for every dollar invested capital would earn in the market's average stock, MHI Hospitality would produce nearly $3. In this article, we will delve deep into its fundamentals to demonstrate the likelihood of such earning actually manifesting. Here is MDH's full guidance for 2013.
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Discussed below is how it is going to meet or exceed that guidance.
Earnings catalyst # 1: lodging sector fundamentals
Lodging demand is most accurately measured as RevPAR, which is the...
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