+ Watch PEB
on My Watchlist
Excellent returns from a high-end Hotel ownership trust
Its smart management makes shrewd acquisitions that have proven profitable thus far. When real estate and the economy rebound, PEB's revenue, margins, and net income should grow even more quickly than they already are. Better yet, seven of its eight board members are independent, and the company pays its trustees and top execs reasonably fair and modest amounts, free of shady perks and benefits.
Rebounding real estate market, good management, growth/income play
Pebblebrook managers managed to get into the industry at the bottom of the cycle. They tend to buy hotels in areas where there is still good demand for them but yet not much room to build new ones. As the US economy improves prices for Hotels will go up. Since there area of concentration are luxury hotels, this class of customers tend to be more resilient to economic issues which will cushion the stock. Only issue that worries me is that as a REIT they are not involved in the day to day management of the hotels and that the management of these hotels are done by a third party.
luxury real estate will bounce back as the economy keeps improving
Trading below book value for a manager that has demonstrated past performance on pulling out more value from hotel properties. And Pebble has some very nice properties on the coasts.
21 Nov 11: In my opinion, this stock has the potential to be one of the best long-term performers in my portfolio over the long term (5-10 years). Management is very experienced and have already demonstrated their ability to execute their business plan. They raised money to purchase hotels after the crash, taking advantage of depressed valuations then invest to both improve revenue and reduce overhead. As earnings ramp up, the dividend will rapidly follow. The common dividend could rapidly approach and then exceed the rate on the preferred shares (PEB.A) which closed today over 8.6%. Combine the future high dividend level with the appreciation potential of the common and you get the best of both worlds, a high dividend based on what you pay today and enormous upside appreciation potential. I purchased about 3.5% of my current portfolio in August paying between $14.25 and $14.65. If we get another pullback to those levels (doubtful but possible), I'll buy more. The only knock on buying more here is that it is a high beta stock. If we get more punishment due to U.S. or European debt concerns (high probability), the shares could be pushed sharply lower. If you think long-term, buy here. If you want to wait for better prices, a pullback will almost certainly bring them. Buy at today's level (below $18) and buy hard below $15.
mkt cap 960mdebt 252mcash 140mp/b 1.06div yield 2.6%div .48 cents a year
Deeply undervalued hotel REIT with 4+% yield. CEO and CFO recently buying at prices under $16.
"blow me down" - popeye
It should be obvious to all that Wall Street is in a funk with no clear cut solutions coming to the fore at this time. And there is certainly no concensus available, let alone even marginally acceptable to the broader market. Things have to push us to the blood-curdling break-point at which time we throw up our hands and say, "OK, I get it and I give." This is the moment witnessing the birth of new hope born of smartly rooted resolve. And this is when people become more amenable to smaller paychecks, less convenient working environments and fewer perks. It is through this acceptance that we will see greater humility in the workplace.This bodes poorly for luxurious living, iconic extravagances (high end hotel accommodations) and glitzy/showy demonstrations of money mismanagement common to big business in fatter times.For this pick to work, the holding period needs to work through a massive inventory of paradigm shifting. It will take time. Better to allocate resources elsewhere or suffer further declines in seed money and find yourself trying to paddle upstream---without a boat.Len
Pro recommendation from Jeff.
I have little experience with REITs, but it seems reasonable to buy them in the trough of the market. Pebblebrook has great management, former Jones Lang LaSalle guy. Has the makings of an up-and-coming best in breed.
A few years ago, I thought about how I could buy all kinds of assets that others werre unloading at what I found to be sale prices. I was able to do it with bonds, which paid off nicely. I was never able to get into the toxic assets playes of CDOs and MBSs. Now, it looks like we have the opportunity in distressed real estate through ROIC and PEB. I already pitched ROIC, but the parallels with PEB are numerous. Jon Bortz is also an industry veteran, and an investment in PEB is a bet that he can perform. We should realize a rising dividend as we get in on the ground floor of this REIT and, as a result, a rising stock price. Naturally, we concern ourselves with the issues inherent to all REITs. Since there is not much cash to plow back into the business, PEB will have to raise funds through new debt or share issuance, neither of which is positive for us. If the dividend continues to appreciate quickly, though, and the money is spent to purchase undervalued assets, it will be worth it.
REO, purchase:hedge against inflation play, chart peeking, market?
Bortz will do it.
blesto haikuCEO Jon BortzBuying hotels on the cheapBring me dividends
Motey special situation play
Betting on the jockey.
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