An untapped area to look for yield? Try relatively small-sized REITs like Brandywine Realty (BDN) and Washington REIT (WRE). Research shows larger REITs such as Public Storage (PSA) and Simon Property (SPG) tend to have lower yields and higher price/book ratios than their smaller cousins solely because of their more likely inclusion as major holdings of ETFs.
"I am as bearish on stocks as I have been in some time," writes Doug Kass. "Much of the current investor optimism expressed in a rising stock market is not consistent with the underlying economic and profit data," he continues, saying the exact same thing David Einhorn said on the GLRE earnings call yesterday.
More from the Greenlight Re (GLRE) earnings call: Einhorn takes advantage of solid January gains in the investment portfolio, lowering net long exposure to 29% from 39%. "Earnings growth has come to a halt. As the markets continue to advance even as the economy doesn't, we tend to become less enthusiastic."
The REIT sector - offering a yield of about 1.30% more than Treasurys - may look nominally attractive, but it's a sell, says John Coumarianos. The companies are trading at 22X Funds From Operations (FFO) - offering no margin of safety should rates turn higher. Most expensive are the apartment owners - EQR, AVB, UDR - priced as if they will have annual rent increases of 5-6% forever.
PSA - Public Storage - Still rising- 17 new higha and up 8.98% in the last month- Relative Strength Index is 70.67% and rising
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PSA vs. ETF Alternatives
Public Storage is engaged in the acquisition, development, ownership and operation of self-storage facilities which offer storage spaces for lease, generally on a month-to-month basis, for personal and business use.