Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

Great Expectations For MHI Hospitality

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.

(click to enlarge)

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...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details