Hunting for Undervalued REITs

Shares of real estate investment trusts have surged recently, and some, including CyrusOneand Simon Property,are trading at their 52-week highs.

What are the undervalued REITs?

Douglas Harter

Analyst, Credit Suisse

“Our August survey data show a continuation of the favorable supply and demand dynamics for the single-family rental sector. This backdrop will support high levels of occupancy and allow for continued rent growth. We reiterate our Outperform ratings on Invitation Homesand Front Yard Residential as our preferred names in the sector.”

Jennifer M. Fritzsche

Analyst, Wells Fargo Securities

“Compared to its broader real estate investment trust peers, Outperform-rated Digital Realty Trusttrades at a notable discount to sectors including industrials, residential, and office. Outperform-rated InterXion Holdingcurrently trades below its peer average, despite our expectation for a superior growth outlook.

David Katz

Analyst, Jefferies

Pebblebrook Hotel Trustand LaSalle Hotel Propertiesentered a definitive merger agreement, an announcement that should continue to support Extended Stay America.

Last Week
Blue Skies for Stocks

Stocks rose on the week as trade concerns eased. The August consumer price index rose 0.1%, below the consensus, with core inflation up 2.2% from a year earlier. Turkey’s central bank defied the Erdogan government and raised rates. Bitcoin, however, continued to fall, ending the week at $6,538. The Dow Jones industrials finished the week up 0.92%, to 26,154.67; the S&P 500 rose 1.2% to 2904.98; and the Nasdaq Composite ticked up 1.36%, to 8010.04.

Trade Talk

Trade talks with Canada continued, as time grows short for the current Congress to be able to vote on a revised North American Free Trade Agreement. Meanwhile, the U.S. met again with the European Union on a broad-based no-tariff pact between the two blocs. The president threatened $267 billion more in China tariffs, on top of $200 billion already in the works. China launched a charm offensive, promising not to punish U.S. companies, an anti-tariff lobbying campaign emerged in the U.S., and the Treasury Department sought new China talks on the $200 billion.

Florence Wallops Carolinas

Hurricane Florence slammed into the Carolinas, after mass evacuations of low-lying coastal areas—a million in South Carolina alone. The slow-moving storm, which has been feeding off warm Atlantic waters, made landfall in North Carolina on Friday, bringing a massive storm surge, torrential rains, and high winds. Meanwhile, two other hurricanes roamed the Atlantic, while Hawaii found itself coping with its second tropical storm.

Moonves Out at CBS

CBS Chairman and CEO Les Moonves abruptly resigned on Sunday after the New Yorker reported a second wave of women claiming he had sexually harassed them. CBS has been resisting a merger with Viacom,orchestrated by National Amusements, which has a controlling stake in both companies. After his exit, the board announced that six new directors would be added to the 13-member board. Moonves could lose his severance depending on the results of an investigation.

Alibaba Transition

Jack Ma, 54, the executive chairman and co-founder of Alibaba Group Holding, China’s e-commerce giant, confirmed he would be leaving the company next year. Ma will be succeeded by CEO Daniel Zhang, 46, who joined Alibaba in 2007.

Freeing Methane

The Environmental Protection Agency moved to weaken rules limiting the release of methane into the atmosphere, a boon to energy companies. The agency earlier this year rolled back limits on tailpipe emissions of carbon dioxide and from coal-fired power plants.

A Manafort Plea?

Lawyers for Trump campaign former chairman, Paul Manafort, negotiated a plea deal with the special counsel’s office forestalling an upcoming trial in Washington D.C. Manafort also agreed to cooperate in the Russia probe.

Bites of a Premium Apple

Apple announced new iPhones with faster chips, fancier displays, bigger sizes—and higher prices. The company announced iPhone XS and XS Max priced at well over $1,000, and a midrange model, the XR, at $759. Apple stock fell by 1.2% on Wednesday but rose on the week.


The Numbers

After its rocket-like rise, Bitcoin continues to plunge. The cryptocurrency has now lost 67% since a record high in December, based on prices from CoinDesk.

$6,538 Bitcoin closing price, Sept. 14, 2018

$11,480 March 4, 2018, recent high

$19,343 Dec. 16, 2017, record high

$4,189 Sept. 11, 2017

$443 Jan. 4, 2016

Comments? E-mail us at editors@barrons.com