Mohit Hajarnis
Long/short equity, special situations, REITs

Float Like A Butterfly, Sting Like A BEE: Why Strategic Hotels & Resorts Is A Real Winner

Strategic Hotels & Resorts (NYSE:BEE) is a Real Estate Investment Trust (REIT) that focuses on luxury properties in profitable urban and resort markets. As of June 30, the company owned or leased 16 hotels in New York, Chicago, Washington DC, and various resort markets. These hotels are operated by world-class operators like Ritz-Carlton, the Intercontinental Group, and Fairmont Hotels.

Despite its strengths, Strategic Hotels & Resorts trades at a discount to its Fair Value Estimate of $14.75 because the market has not priced in the recent changes to BEE's capital structure, the market overestimates its riskiness, and without a proven earnings track record, the company trades closer to NAV (guaranteed assets) than P/E (future earnings). An in-depth and...

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