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

Chesapeake Lodging Is Substantially Undervalued Despite A Superior Portfolio

The Buy Thesis

The buy thesis for Chesapeake Lodging Trust (NYSE:CHSP) is quite simple. Given the quality and location of its properties and the lack of leverage, CHSP trades at a far lower multiple than it should. Specifically, Chesapeake trades around 11X FFO while it should trade at 16X. Through peer analysis, we will demonstrate that there are three aspects of hotel companies that tend to (and should fundamentally) garner a premium multiple: hotel quality, hotel location, and low leverage. Chesapeake epitomizes all three of these qualities.

This article will establish an understanding of Chesapeake's place within the hotel sector and demonstrate it to be underpriced. The market's realization of CHSP's superior aspects should grant it appreciation through...

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