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Show Me The Money: The Perils Of REIT ETF Investing
- An unstated, though fundamental, element to purchasing many of the widely held equity index ETFs: Buying the good, the mediocre and the bad equities.
- Peter Lynch, one of the greatest investors of all time, calls this "di-worse-ification.".
- The investment relationship with ETFs is complicated. Investors shouldn’t get lulled into accepting consistent, slight underperformance, because of a desire to avoid large deviations from index returns.
- I can’t provide you with specific details because I owe my dedicated subscribers the content; however, I can tell you that my tactically-weighted portfolio has returned over 21% year-to-date.
Pebblebrook Hotel Trust - A Luxury Brand To Consider
- In other words, the word luxury is synonymous with the Trump brand and if I did not know any better, I would have thought that Donald Trump created it.
- When it comes to luxury-based products, loyal patrons will buy beyond traditional purchases, almost immune to price – kind of the complete opposite of a value investor, eh?
- Although the P/FFO multiple denotes opulence, the durable growth prospects and strong balance sheet provide comfort with the contemplated entry price.
- There are just a handful of REITs that I would consider buying with P/FFO multiples above 18x and Pebblebrook is one of them.
Digital Realty Has A Powerful Moat Of Dividend Repeatability
- Although Mr. Market oftentimes ignores the true long-term profits that are the basis for a wide moat, he eventually becomes more rational in nature and provides a more accurate representation.
- A wide moat business, purchased at the right price, is the ultimate “sleep well at night” investment, and I recognized that opportunity in December 2013.
- "This mutual attraction and our interconnected global portfolio essentially act as a wide moat that is extremely difficult for competitors to replicate." - Bill Stein of Digital Realty.
I'm Happy To See This Healthcare REIT Spreading The Love
- Today, HTA’s board of directors sent me an early Valentine’s Day gift by declaring a cash dividend for the third quarter of $0.145 per share.
- Although I was hoping to see a more substantial boost, the recent dividend news gives me a better feeling that management at HTA is committed to shareholders.
- My latest purchase was on December 3, 2014 and my total return is up 24%.
Will The Lobster Deal Be A Tipping Point For This Net Lease REIT?
- "In the end, Tipping Points are a reaffirmation of the potential for change and the power of intelligent action. - Malcolm Gladwell, The Tipping Point.
- "The name given to that one dramatic moment in an epidemic when everything can change all at once is the Tipping Point." - Gladwell, The Tipping Point.
- I believe the Red Lobster deal is a "tipping point" for ARCP and with over $2 trillion of opportunities in the highly fragmented Net Lease sector.
The Day I Was Surrounded By Market Timers
- As soon as the first stock chart went on the screen I knew that I was not in Kansas anymore.
- To put it bluntly, I was witnessing a form of gambling in which there was no valuation analysis whatsoever – just plain and simple speculation.
- Many ordinary investors all too often act on inflection sentiments when they buy and sell stocks, always looking for instant gratification.
Be Prepared For Mid-Year REIT Results, Part 3
- I currently own 19 REIT securities and in this third edition, I will provide the final forecast that includes 5 of the REITs that I own.
- Maybe Gramercy (GPT) won’t be Babe Ruth (714 HR’s) in 2014 but I’ll settle for Sammy Sosa (609 HR’s).
- It takes only a few large losses to decimate overall investment performance, even if many other investments prove successful.
Can Red Lobster Claw Back Its Once Loyal Customers?
- Over the century brands have become less about trust and more about certainty, instead becoming advertising catchphrases designed to appeal to customers.
- People often seek out the closest Starbucks location in a cult-like ritual where the brands trademark is only recognizable by a text-less logo of the mythological Norse Queen.
- It’s clear that there are lessons learned from the Starbucks transformation and hopefully Golden Gate and Red Lobster can learn from the coffee king.
- Red Lobster has an uphill battle and the key to predicting the success of the fading brand is to claw back loyal customers.
Finding A Margin Of Safety In Realty Income
- I was not a buyer when shares were trading at over $55.00 a share in May (2013) and I waited on the right pitch to get in the game.
- Every investor has his or her own risk tolerance level and that simply means that it comes down to how much you can afford to lose.
- Unfortunately I cannot help you swing the bat, only you can do that.
Be Prepared For Mid-Year REIT Results, Part 2
- Earnings results aren't meant to deceive investors, but it's up to the prospective investor to bifurcate the wheat from the chaff.
- Once you have a sense of a company's financial health, it's time to check out the earnings call transcript.
- As an investor in any public company, you are actually paying a fraction of the CEO's salary.
Be Prepared For Mid-Year REIT Results
- As elegant as a headline is that boasts “ABC Company Beats Guidance”, it’s important that investors don’t distill a full quarter of results into a single number.
- Whatever you’re considering, it’s important to compare apples to apples. That is, make sure that you’re comparing the growth rate of two numbers provided in the filing.
- When I was a boy scout, I could easily recite the oath and I could never forget the scout’s motto: BE PREPARED.
It May Be Time To Check Into Chatham Lodging Trust
- Chatham pursues a unique strategy of focusing on premium brand select service hotels such as Residence Inn, Homewood Suites, Hyatt Place, Courtyard and Hampton Inn.
- Over the last 3 years Chatham has increased its annual dividend by an average of 11.1%.
- Chatham is one of the cheapest Lodging REITs (based on P/FFO) in the peer group.
- In a perfect world, I would like to own Chatham at $18.00, but that’s not reality.
Silly Rabbit, Dividends Do Matter In Retirement
- The most common reason for a company to avoid paying dividends is to avoid subjecting itself to capital market discipline.
- The author went on to cite the “Joe and Theresa” analogy which (upon reading it) it clearly suggests that the author doesn't have the slightest understanding of the Modigliani-Miller theorem.
- It’s not that investors have an “emotional” attachment to a dividend payment, it’s simply that dividends represent a commitment by the company to its shareholders.
- Realty Income has built its brand value on 4 words: The Monthly Dividend Company.
An Intelligent Investor Should Consider REITs
- In terms of investing, I would consider a “cheerleader” to be more of a public relations firm.
- So while I may not be a “cheerleader” for REIT investing, I’m certainly a bullish proponent for the asset class.
- If I’m every called a cheerleader, I prefer to be called the cheerleader who is known for protecting principal at ALL costs.
Whitestone Looks Cheap, Should I Make The Leap?
- Whitestone's non-credit oriented model is unique to the shopping center REIT space, but does the riskier revenue stream provide investors with out-sized opportunity?
- The company's value proposition is to buy distressed assets and apply some TLC (tender loving care) and produce enhanced cash flow.
- This REIT is cheap and I believe the shares don’t adequately reflect the risk premium.
Are There Any Blue Chip REIT Bargains?
- The name “blue chip” may have originated from the speculative game of poker.
- I would never recommend buying a blue chip for the sake of owning a blue chip.
- The blue chip REIT must have demonstrated a sustainable track record for contributing a long record of stable and reliable growth.
How Do You Buy An Irreplaceable Corner?
- With 20 shopping center REITs today, the sector has become extremely crowded.
- It’s extremely difficult to find a meaningful value proposition that translates into powerful forms of differentiation.
- The only shopping center that I covet is Federal Realty.
- If Regency expects to be successful in its bid to take over AmREIT, it will have to increase its offer significantly.
Will This Healthcare REIT Spread Some Dividend Love?
- HTA entered the MOB space at a perfect time – when new MOB development started to decline.
- If I was a physician and I wanted to be as close to my customers as possible, where would I lease?
- All I ask is for management to increase the dividend and spread the love.
Where Are The Digital Shorts Now?
- To me, it was obvious that the Highfields wager was foolish, since the data center landlord had strong operating fundamentals and an equally impressive balance sheet.
- REITs have a much better barometer for valuing earnings, and if I were shorting a REIT today I would be focused on the stability of the dividend stream, not book.
- Whenever the financial markets fail to fully incorporate fundamental values into securities' prices, an investor's margin of safety is high.
- S&P just revised the outlook on Digital to stable from negative, as well as affirming the "BBB" corporate credit rating on the company.
Mr. Market Doesn't See The Seafood Lover In American Realty Capital Properties
- ARCP's dividend yield is higher today than it has been since August 2012, while the quality of the income has increased substantially.
- As I ponder ARCP today, I'm seeing noticeable evidence that the shares are mispriced.
- As a real estate investor, it's important to recognize the "wheat from the chaff" and determine if there is adequate return for the risk.
- There is risk in owning this REIT, and the market has rewarded investors with an 8% yield in return.
Taubman Is A REIT Brand I Can Trust
- As I saw the “margin of safety” moving my way I pounced on the shares of my only Mall-based REIT at a price of $64.29.
- I bought shares in Taubman because of its “Rolex-like” track record of dividend performance.
- For Mall REITs, it comes down to “survival of the fittest” and the key ingredient for that measurement is demographics.
- With around $450 million of cash to deploy, Taubman could lever up easily and take down a $1 billion whale with no problem.
- My decision to invest in this luxury-branded REIT had more to do with trusting management than trusting Mr. Market.
Should I Short These 3 REITs?
- Occasionally I run across a few plants (stocks) that seem to be deteriorating and, as a result, I seek to avoid the companies all together.
- Through trial and error, I have found that it’s simply better to be in the market invested in stocks that offer the highest potential returns than play the timing game.
- Regardless of my risk tolerance level, the short sellers haven’t stopped betting against REITs and when that feeding frenzy becomes a catalyst, the “squeeze” ensues.
- It’s important to realize that investors who pay close attention to net profit margins have been able to predict just about every negative event.
Will This REIT Become The Next 'McDonald's' For Storage?
- Much like the fast food sector, there are just around two dozen self-storage operators (including the 4 self-storage REITs) that own around 7,000 facilities.
- Because the self-storage industry is highly fragmented, the public REITs should be able to continue to consolidate and achieve efficiency with economies of scale.
- The larger companies are taking a disproportionate share of customers that are available in the marketplace.
- It’s time to make a move before Extra Space becomes the next "McDonald’s in self-storage."
Ehh, What's Up DOC?
- MLV’s research is spot-on and it’s great to see broader coverage in the “sharpshooting” health care sector.
- I sold out of MPW for a variety of reasons, including competition (with the hospital sector) and share under-performance.
- I support MLV’s price target of $16 as I believe that there is strong momentum to support the estimated 34% growth rate.
- I plan to maintain my current allocation and for new investors I would wait for a pullback.
Is Annaly A Sleep Well At Night Investment?
- Many readers that have read my research over the years realize that my biggest issue with the mREITs is the volatility of the income stream.
- A SWAN investor is the opposite of a market timer who thinks he or she can capture large returns by jumping in the market to make a quick profit.
- By paying close attention to profit margins, intelligent investors can better predict the companies that could have a negative earnings impact.
ARCP May Have A Secret Sauce And It's Not Tartar Sauce
- ARCP has become more like the kid in the candy store gobbling up just about everything in sight.
- Now that ARCP is gaining significant exposure with a non-investment grade tenant, the risk for tenant default becomes much greater.
- I’m not a seafood lover but I do see some attractive ingredients brewing with ARCP and Cole Capital could be the icing on the cake.
The Rockefeller REITs, The Ones That Pay Monthly
- In this article I’ll provide you with an updated list of 17 REITs that pay monthly.
- Oftentimes investors overlook the frequency of the dividend payment.
- In addition to more frequent compounding, the monthly paying companies also offer less market risk.
- By investing in REITs that pay monthly you're able to better match fund your living expenses and create a more disciplined approach to saving and investing.
- My classic reason to own monthly dividend stocks is for the power of compounding.
A Small-Cap REIT Differentiated By Risk Control
- LTC is better prepared for reimbursement risks as the company has aggregate government reimbursement exposure less than 45%.
- LTC has just .48% in secured debt, the lowest in the peer group.
- 86% of LTC’s debt is fixed long-term with a weighted average interest rate of 4.8%.
- LTC is compensating much like Realty Income – I get a 5.5% dividend yield with modest growth.
General Growth Properties Has Plenty Of SALSA
- As I analyze Retail REITs today, I pay special attention to the companies that demonstrate the best forms of differentiation.
- Upon closer investigation one can see that General Growth has not always enjoyed a powerful model of repeatability.
- As the Regional Mall industry continues to consolidate, the strongest players will be the companies with the healthiest sources of differentiation.
- The most successful REITs must be able to benefit from scale, access capital, and enjoy strong tenant relationships.
Simon Says, Health Care REIT Spinoff Might Be Next
- It’s true that the health care property sector remains highly fragmented; however, is it possible that at some point will growth be sacrificed by operation acumen?
- As a prospective (or current) investor in HCP, the dividend track record is the most compelling metric.
- I believe that (at some point) one of the large diversified REITs will merge with another.
The Inside Scoop On This Pure Play New York REIT
- New York City is arguably one of the best real estate markets in the world.
- By focusing on just this one market we think it gives us a competitive advantage and many of the deals we do are off-market or quasi-off-market.
- Based on our estimated 2015 AFFO of $0.54 per share, the dividend of $0.46 per share represents an 85% AFFO payout ratio.
Silly Rabbit, Externally-Managed REIT Tricks Are For Kids
- I have often argued that the externally-managed REIT model is inherently misaligned resulting from various conflicts of interests.
- If Ventas doesn’t acquire HCT, the miserable investor will look foolish when he finds out he lost the buyer of his Ford pickup truck.
- Although SNH has a disadvantage in terms of its exposure with one self-dealing tenant, the company does enjoy a competitive advantage in its balance sheet execution.
- I just can’t come to grips with investing my hard-earned capital into an externally-advised REIT.