The buy thesis
Ventas Inc. (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.
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.
- REIT related selling through ETFs
- Tax loss selling
- Misguided fears of rising interest rates
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