tisdag 1 december 2015

American Hotel Reit

Jag har vid flera tillfällen skrivit i förväg hur jag tänkte göra med det bolaget i takt med att kursen repade sig från sub 10 då jag tyckte det var kanonköp med över 9% utdelning som var/är mycket väl underbyggd, inte minst då vinsterna inflateras av stigande usd vs cad (utgifterna för utdelningen).

Nåväl, nämner därför nu att jag tagit vinst på 75% av mitt innehav dagarna EFTER månadsutdelningen skiljdes av. Fortfarande ett rätt stort innehav och nyckelkursen att hålla koll på är fortsatt 10.70 cad. Är vi över det riskerar vi PP (nya aktier ges ut) för expansion vilket aldrig är uppskattat, är vi under så är det i princip bara att hålla aktien och njuta av utdelningen. Nu är vi under igen. Siffran kommer från en tydlig antydan från CEO.

Kursen har drivits av denna artikel. Inget nytt för de läsare här som haft ett öppet sinne för annorlunda investeringar och målet att sänka sin totala portföljrisk. Notera att den här typen av bolag nästan alltid är förtjusta i att göra PPs när kurserna går bra dvs det är en risk man behöver ta hänsyn till och vända till sin fördel. Den andra stora risken som jag ser med denna typ av investering är att inte lägga fingrarna i mellan när kvartalssiffror siffrorna visar sämre utdelningstäckning. AHIP är som sagt mycket lugn men vi har sett t.ex Dream Global tappa som jag skrivit om. Bästa REIT vid dagens priser i min portfölj tycker jag är Dream Industrial. Jag ligger med ca 10% vikt där idag och lite minus. (Kan också på annat ämne passa på att jag tog vinst på 30% av mitt innehav i POE igår på drygt 1.36 snitt för att sänka vikten till mer lämplig, handlar om att jag alltid vill kunna "köpa mer" om ett innehav backar oväntat.).

A high-yield play, and you sleep at night

Thursday, November 26, 2015
Investors seeking stable income should consider this Vancouver-based hotel REIT, which has healthy exposure to the U.S. market
JENNIFER DOWTY

Inside the Market
For investors seeking income but who may already hold high-yielding bank and telecom stocks, today I'd like to focus on an attractive, high-yielding investment recommended to diversify your income portfolio with its U.S. exposure - that investment is American Hotel Income Properties Real Estate Investment Trust LP.
Investment thesis
Vancouver-based American Hotel Income Properties REIT LP, or AHIP, has a portfolio of 79 hotel properties across 27 states. The REIT is focused on owning and acquiring hotels in secondary markets that are located in high traffic areas in close proximity to transportation such as railways, airports and highways. The company's portfolio is divided into two segments, "railway" (44 hotels) and "branded" (35). The former segment operating under the banner Oak Tree Inn Hotels, services the U.S. rail industry.
They have an attractive feature - lodging contracts spanning over a number of years. Approximately 76 per cent of the guestrooms are guaranteed, which smooths the company's funds from operations (FFO) and provides reliable cash flows. The branded hotels segment has franchise agreements with leading hotels such as Hilton (Hampton Inn) and Marriott (Courtyard).
Key attributes include:
Acquisition growth: Management's objective is to purchase properties at a discount, below replacement value. Since the start of 2014, the total number of guestrooms has more than doubled to 6,891 from 3,113 through its acquisitions and development projects. The REIT's debt-to-gross book value was 50 per cent at the end of the third-quarter, allowing it financial flexibility to make additional acquisitions. Management targets a debt-to-gross book value of between 50 per cent and 55 per cent.
Top-tier railway clients: AHIP has railway agreements with operators such as Union Pacific Railroad and Canadian Pacific Railway.
Securing and renewing new contracts at favourable terms such as higher daily rates, higher minimum-occupancy guarantees, and longer contract terms. Since going public, the REIT has increased its guaranteed-room percentage to 76 per cent from 74 per cent.
Solid hotel industry growth forecast: STR, a leading provider of hotel data, forecasts growth in revenue per available room, or RevPAR, of 6 per cent in 2016, driven primarily by average daily rate (ADR) increases. The hotel data provider also forecasts the ADR to increase 5.2 per cent in 2016. During the third-quarter, AHIP realized RevPAR growth of 4.8 per cent year-over-year boosted by higher average daily rates, which increased 13.3 per cent year-over-year.
U.S. economic recovery: The World Bank and International Monetary Fund are both forecasting U.S. GDP growth of 2.8 per cent in 2016. A strengthening economy may improve travel and hotel stays, and lift the occupancy rate, as well as support increases in the average daily rates.
Strengthening U.S. dollar: The strengthening greenback is positive for distributions, which are paid in Canadian dollars.
Distribution policy AHIP pays unitholders a monthly distribution of 7.5 cents per unit, or 90 cents a year, equating to an annualized yield of more than 8 per cent. The distribution appears sustainable with the adjusted-funds-from-operations (AFFO) payout ratio at 72.9 per cent in the third-quarter, and 87.1 per cent year-to-date.
Valuation The REIT is trading at a price-toFFO multiple of 7.2 times the 2016 consensus estimate, and at a price-to-AFFO multiple of 8.5 times the 2016 consensus estimate. This is based on an exchange rate of $1.33 per U.S. dollar.
Analysts' recommendations There are five analysts who cover this REIT and all five analysts have "buy" recommendations.
Price targets range from $12 to $13.25 with the average one-year price target at $12.56, equating to a potential price return of approximately 20 per cent.
The consensus FFO per unit estimate is 94 cents (U.S.) in 2015, rising 17 per cent to $1.10 in 2016.
The consensus AFFO per unit estimate is 80 cents in 2015, rising to 93 cents in 2016.
Chart watch The REIT has a limited trading history with its initial public offering in February, 2013. During this time, the REIT has traded largely in a tight range, between $10 (Canadian) and $11.50. Yearto-date, the unit price of AHIP is up 4 per cent.
The bottom line This REIT is recommended for investors seeking stable income.
Institutional investors should be aware that the probability of a bought deal financing increases as the unit price rises. In August, on the second quarter conference call, management indicated that they would like to wait until the units get to "a level [of] two deals ago," before an equity financing would be considered again. Back in April, 2015, there was a financing at $10.70 per unit.

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