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.
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...
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