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

Ventas: Get Blue Chip Quality Without Paying For It

The buy thesis

Ventas Inc. (NYSE:VTR) is a healthcare REIT of supreme quality and it is usually priced as such. However, the recent sell-off provides an opportunity to obtain said quality at a bargain. Fundamentally, Ventas is still thriving with growing earnings, dividends and guidance, yet it has dropped 30% since May 21st and underperformed the S&P by 38% over the past year.

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We believe the current market pricing is consequent to temporary conditions and that substantial capital appreciation will occur upon the cessation of said conditions.

Origin of opportunity

There seem to be 3 temporary conditions driving VTR's underperformance.

  1. REIT related selling through ETFs
  2. Tax loss selling
  3. Misguided fears of rising interest rates


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