• Wed. Nov 29th, 2023

    An Analysis of Resilient REITs: Five Low-Priced Stocks That Have Recently Made Significant Gains

    ByNuala Hafner

    Nov 20, 2023
    An Analysis of Resilient REITs: Five Low-Priced Stocks That Have Recently Made Significant Gains

    Real estate investment trusts (REITs) have witnessed a notable resurgence in recent weeks, with some of the previously underperforming stocks showcasing remarkable growth. When stock sectors experience a decline in value during certain points of market cycles, it is not uncommon for the worst performers in the sector to outperform the rest of the group as the sector begins to rebound. In this article, we will examine five low-priced REITs that have made substantial gains within the past five trading days and over the past four weeks.

    One such REIT is Franklin Street Properties Corp. (NYSE:FSP), an office REIT headquartered in Wakefield, Massachusetts. Despite being a poor performer over the past year, with losses ranging between 10% and 65%, Franklin Street has recently caught fire and experienced a 13.68% increase over the past five days and 48.77% growth in the past month. The company’s adjusted funds from operations (AFFO) have shown improvement, although revenue and portfolio occupancy rates have declined.

    Cherry Hill Mortgage Investment Corp. (NYSE:CHMI), a diversified residential mortgage REIT based in Farmingdale, New Jersey, has also witnessed significant gains. With a 9.22% increase over the last five trading days and a 25.91% rise in the last month, Cherry Hill Mortgage reported impressive third-quarter operating results, surpassing estimates in terms of earnings per share (EPS) and revenue.

    Industrial Logistics Properties Trust (NASDAQ:ILPT), a Newton, Massachusetts-based REIT that owns and leases industrial and logistics properties throughout the United States, is another standout performer. It has experienced a 7.33% increase over the past five trading days and a 25.75% growth over the past four weeks. With strong occupancy rates and solid third-quarter operating results, Industrial Logistics has demonstrated its resilience.

    City Office REIT Inc. (NYSE:CIO), a Dallas-based office REIT, and Ashford Hospitality Trust Inc. (NYSE:AHT), a hotel REIT headquartered in Dallas, have also seen noteworthy gains. City Office REIT has gained 10.6% over the past five trading days and 19.84% over the past month, while Ashford Hospitality Trust has exhibited a 14.08% increase over the past five trading days and a 5.86% rise over the past month. Both companies have faced challenges in the past but have shown signs of recovery in recent times.

    It is important for investors to approach these low-priced REITs with caution, considering their historical poor performance and volatility. These stocks should be regarded as speculative plays and purchased during pullbacks to mitigate risk.

    Frequently Asked Questions (FAQ)

    Q: What are REITs?
    A: REITs (real estate investment trusts) are companies that own, operate, or finance income-generating real estate properties. They allow investors to indirectly invest in real estate without directly owning and managing properties.

    Q: Why have these low-priced REITs experienced significant gains?
    A: When sectors rebound after a decline, the worst performers often outperform the rest of the group. Additionally, the demand for lower-priced stocks within the sector and investors covering short positions can drive up the prices of these stocks.

    Q: Are these low-priced REITs a good investment?
    A: These low-priced REITs should be approached with caution as they have a history of poor performance and volatility. Investors should assess their risk tolerance and consider purchasing these stocks during pullbacks to reduce their risk.

    Q: Are there any income opportunities with these REITs?
    A: While some REITs may offer dividends, it is important to note that Ashford Hospitality Trust has suspended its dividend since 2019 and has not paid one since. Investors should carefully evaluate each REIT’s dividend policy before considering them as income investments.

    Q: Where can I find more information about REITs?
    A: You can find more information about REITs and investment opportunities in them through reputable financial news websites and by consulting with a financial advisor.