Repositioning Of The REITs Should Help The Share Price Of RMR

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About: The RMR Group Inc. (RMR), Includes: DHC, OPI, SMTA, SVC
by: George Atuan, CFA
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George Atuan, CFA
Long/short equity, latam focus, medium-term horizon, contrarian
Summary

RMR's repositioning in three of the client companies will help the share price of the managed REITs. The higher the share price of those REITs, the higher RMR's revenues.

While I think an acquisition would be the quickest way to enter the multifamily segment, I think RMR will not obtain favorable terms. Instead, they should go organic.

By going organic, RMR could redeploy most of its cash on hand to repurchase 17.5% of its shares.

I recommend buying RMR with a target price of $86.

Source: Entertainment Weekly

The share price of The RMR Group Inc. (RMR) is down almost 7% since our bullish thesis in November. In this article, I will provide an update, my view regarding