November 1, 2017

Bridge The Valuation Gap With These REIT Bargains



The “valuation gap” is the difference between a seller’s asking price and the market value of a company.

In REIT terms, investors are continuing to seek out high-quality real estate as evidenced by the valuations of many dividend stalwarts such as Tanger Factory Outlets (SKT), Simon Property Group (SPG), and Kimco Realty (KIM).

In my monthly newsletter (being published November 1st) and within my Intelligent REIT Lab, there are many HOLDs and BUYs, but just a handful of STRONG BUYs.

Not all REITs are the same, and we are now witnessing a number of sectors being beaten down by macro-economic forces. As a result, these under-performing sectors have seen share prices decreasing, further widening the gap between lower REIT market values and higher net asset values.

This “valuation gap” has prompted speculation among investors over the prospect for increased REIT mergers or buyouts by big private equity players. As you know, from time to time, I will point to REIT M&A when I see cheap REITs, but I always caution investors not to confuse real catalysts with fantasy football.




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