Home Properties, Inc. (NYSE:HME)

AygHead (58.20) Submitted: 11/19/2012 2:07:20 PM : Start Price: $57.70 HME Score: -9.32

Residential REIT's is like buying a utility with an inflation hedge. FFO is a bit rich, yes, but there are forces at work that should keep FFO stable or increasing. For one, the debt market is favorable now and for the forseable future for large real estate investors. Second, despite the supposed pending residentail housing boom that is running through the media, an increase in either property tax or income tax - or both - will give people pause to purchasing a new home. In essence, the rental market will remain strong and this market is already tight in many markets. In addition to these macro condition, many of these residentail REITs own properties in the prime / desirable locations of CBD's, where the population continues to migrate....Manhattan, LA, Denver, DC etc. In these areas, if you want commutability, you are more likely forced to live in a rental apartment/complex than a single family home.

In summary, market should be supportive to rental rates, low cost of financing, scarcity of product in prime locations, and real estate as an inflation hedge all bode well for the long term benefit of incorporating residential REITs into your portfolio....with a nice dividend to boot.

foolfully (59.06) Submitted: 1/27/2012 3:59:13 PM : Start Price: $55.38 HME Score: -10.48

100

mdk0611 (57.66) Submitted: 9/23/2011 2:50:17 PM : Start Price: $51.15 HME Score: -21.81

.

SuperPicks (29.70) Submitted: 3/17/2010 2:44:27 AM : Start Price: $41.07 HME Score: -13.36

This is a part of 4 part pure downthumb play on REIT here on CAPs (entered 3/16/2010):
in order from most overvalued to least: AEC, TCO, HME, ALX

The first two (AEC &TCO) appear to be sure-deal underperforms IMO.

The stock charts on each of these have done fairly well during the past 5 years, 3years, and past 1 year. Additionally they have done much better than their other REIT counterparts. The market has bet each of these have some fundamental (location, property type, income levels, debt structure, etc) significantly better than the rest of the pack. Now this may be true, but not at these valuations pal.
I'll reference snippets of profile (from Reuters website) of each that are valid reminders for me:
AEC:
multifamily real estate. The properties the Company owns are concentrated in Ohio, Michigan, Georgia, Florida, Indiana, Virginia and Maryland. As of December 31, 2009, approximately 32%, 24%, 14%, 10%, 7%, 7% and 6% of the units in properties it owns were located in Ohio, Michigan, Georgia, Florida, Indiana, Virginia and Maryland, respectively.

TCO:
Regional/Super-regional shopping centers. The centers are located in metropolitan areas, including Atlantic City, Charlotte, Dallas, Denver, Detroit, Los Angeles, Miami, New York City, Orlando, Phoenix, San Francisco, Tampa and Washington, District of Columbia.

HME:
East coast. Has been conservative and has desirable type rentable communities (not luxury spots so relatively inexpensive to rent).
Owns, operates, acquires, develops and rehabilitates apartment communities. The Company's properties are regionally focused, primarily in selected Northeast, Mid-Atlantic and Southeast Florida markets along the East Coast of the United States.

ALX:
The Company is managed by, and its properties are leased and developed by Vornado Realty Trust (Vornado). As of December 31, 2009, the Company had seven properties in the greater New York City metropolitan area. It consisted of the 731 Lexington Avenue property, the Kings Plaza Regional Shopping Center, the Rego Park I shopping center, the Rego Park II property, the Paramus property and the Flushing property.

The 731 Lexington Avenue property, a 1,307,000 square foot multi-use building, comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan. The Kings Plaza Regional Shopping Center contains 1,351,000 square feet and is located on Flatbush Avenue in Brooklyn. The Rego Park I shopping center contains 351,000 square feet and is located on Queens Boulevard and 63rd Road in Queens, New York. The Rego Park II property, a 600,000 square foot shopping center is located adjacent to the Rego Park I property in Queens, New York.

Juggernaut0609 (94.50) Submitted: 2/24/2010 6:12:23 PM : Start Price: $39.23 HME Score: +10.89

Looking at the stats, SEC filings and the balance sheet, this company looks to be turning a profit and pushing forward in the long run. Yes, it is a real estate company, but eventually people are going to start back into real estate and the market will move forward.

Nittany95 (98.14) Submitted: 7/19/2008 9:59:06 AM : Start Price: $31.31 HME Score: +82.09

HME has figured out how to do it right. They are not chasing all A+ properties/luxury apts. like Avalon or Equity. Instead, they are targeting tenants with modest incomes that are looking for a nice place to live but don't desire to pay top-of-the-line pricing for only slightly better accomodations. This enables HME to buy units cheaper, invest less capital and hit the sweet spot of the rental market - people looking to rent for a few years before they move up to a single family home.

In the current economic environment, the HME strategy also enables them to attract people who need to scale down due to home price/mtg issues.

Besides all of that, they run the shop conservatively, have a nice dividend, and pay attention to shareholders. The only negative I have is that the board of trustees is a bit too cozy with management.

vesseycapital (< 20) Submitted: 5/22/2008 10:24:08 AM : Start Price: $38.06 HME Score: +44.62

Inverse relationship to U.S. Housing woes and aprtment sector

dbhealy (98.72) Submitted: 3/18/2008 3:57:13 PM : Start Price: $36.48 HME Score: -55.01

bearish on everything related to housing for the next year

tsperbeck (99.47) Submitted: 11/9/2007 10:12:43 AM : Start Price: $32.40 HME Score: -77.89

Overvalued; 128% price/fair value.

WBDisciple (77.55) Submitted: 11/2/2007 3:06:47 PM : Start Price: $35.35 HME Score: -64.53

P/E at historically high. Nearly 11/2

Gone up too much must come down.

Will such rule works? Let see a year from now.

thecyberguy (66.68) Submitted: 9/25/2007 11:36:55 AM : Start Price: $38.92 HME Score: -49.01

Bad market

RdandMon87 (< 20) Submitted: 8/3/2007 8:10:49 PM : Start Price: $34.63 HME Score: -63.09

Housing Market is yet to find a bottom, and will continue fall. Subprime market has also taken a beating and with tightening credit lines mortages will be hard to come by, making housing unavailable for many.

Over the Past 4 quarters Net income has been declining. For the quarter ended 12/06 we see a large income # reported but should be significantly discounted due to the income generated from norecurring events.