Float Like A Butterfly, Sting Like A BEE: Why Strategic Hotels & Resorts Is A Real Winner
- Strategic Hotels & Resorts is undervalued by the market because of its poor financial history, and a misunderstanding of key risks.
- Recent management initiatives have drastically improved the company’s balance sheet and financial condition. Additionally, global macro tailwinds and high-barriers to entry create strong earnings potential.
- These changes have yet to be priced into the stock, which trades closer to NAV because BEE has yet to post positive full year earnings.
- Nonetheless, the company generates outstanding FCF (Free Cash Flow) and FFO (Funds from Operations), and is on track to its first positive year in 5 years.
- Once BEE posts solid full-year earnings, the stock will trade closer to P/E multiple than NAV.