PLD

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Public Storage Is Simply A Monster REIT Idea!

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Image Shown: REITs have struggled relative to other investing areas during the past 5 years. Absent the areas of crypto tokens, speculative disruptive innovators and technology, the most prudent area has been large cap growth the past five years, an area that we have been materially overweight in the newsletter portfolios. By Brian Nelson, CFA  REIT returns haven’t been that great the past several years (as shown above), but that may be no reason to fret. Some of the top yielding REITs across our coverage include Arbor Realty Trust (ABR), Iron Mountain (IRM), LTC Properties (LTC) and Omega Healthcare (OHI). These REITs come with significantly elevated risk, however. There’s one REIT that may not yield quite as much, but it … Read more

ICYMI: Dividend Growth Idea Realty Income Completes Transformation, Further Expands Overseas

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This article originally appeared on our website November 17, 2021. Image Shown: An overview of dividend growth idea Realty Income Corporation’s tenant base, though this appears to be before taking into account its recent merger with VEREIT and spinoff of its corporate office properties portfolio. Image Source: Realty Income Corporation – November 2021 IR Presentation By Callum Turcan On November 1, Realty Income Corporation (O) completed its stock-for-stock merger with VEREIT, a deal that according to an April 2021 press release had an enterprise value of ~$50 billion. When the merger closed, shareholders of Realty Income owned ~70% of the new entity and shareholders of VEREIT owned the remainder. Realty Income is a real estate investment trust (‘REIT’) with a … Read more

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

Digital Realty Boosts Guidance and Further Extends Growth Runway

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Image Source: Digital Realty Trust Inc – Third Quarter of 2021 IR Earnings Presentation By Callum Turcan On October 26, Digital Realty Trust Inc (DLR) posted third quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The data center real estate investment trust (‘REIT’) saw its GAAP operating revenues come in at $1.1 billion (up 11% year-over-year) and its non-GAAP core funds from operations (‘FFO’) per share come in at $1.65 per share (up 7% year-over-year) last quarter. Digital Realty also increased its guidance in conjunction with its latest earnings report, which we appreciate, as that signals the REIT is growing confident that it will exit 2021 on a high note. Digital Realty’s business is steadily recovering after … Read more

Dividend Growth Idea Realty Income Is on the Rebound

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Image Source: Realty Income Corporation – August 2021 IR Presentation By Callum Turcan Realty Income Corporation (O) is a real estate investment trust (‘REIT’) that is steadily recovering from the worst of the coronavirus (‘COVID-19’) pandemic. For reference, Realty Income focuses on freestanding singe-tenant commercial properties in the US and the UK. The financial health of the portions of its tenant base that were hit particularly hard by the pandemic, such as movie theater operators, has improved considerably of late. Back during the second quarter of 2020, Realty Income collected 86.5% of its contractually owed rent across its entire portfolio as many of its movie theater and health & fitness tenants, and to a lesser extent its causal dinning tenants, … Read more

Two High-Quality REITs Report Earnings: Crown Castle and Digital Realty

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Image Shown: Crown Castle International Corp. forecasts that its core financial metrics will continue to grow in 2021. Image Source: Crown Castle International Corp. – Fourth Quarter of 2020 IR Earnings Presentation By Callum Turcan Searching for lofty yields in a low interest rate environment comes with substantial risks as high yields can sometimes be more indicative of the expected headwinds facing the company or entity in question rather than an excellent risk-reward opportunity. We published an article back in September 2020 titled High Yield Dividend Income Investing in a Time of Need (link here) that highlighted our thoughts on this issue and why we think investors in high-yielding enterprises need to keep their guards up. All yields–even of the … Read more

ALERT: Raising Cash in the Newsletter Portfolios

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January 27, 2021 ALERT: Raising Cash in the Newsletter Portfolios We are raising the cash position in the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to 10%-20%. — By Brian Nelson, CFA — Our research has been absolutely fantastic for a long time, but 2020 may have been our best year yet. You can read the 2020 recap here. With the S&P 500 trading within our fair value estimate range of 3,530-3,920 (and the markets rolling over while showing signs of abnormal behavior), we’re raising the cash position in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to 10%-20%. — For more conservative investors, the high end of this range may even be larger, especially … Read more

3 Lessons in Portfolio Management Over 10 Years

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Dear members: — We’re finally getting a pause in the rapid ascent of the markets on September 3rd. Though headlines may look scary and momentum/volatility investors could start to pile on to the downside, a modest retracement is actually a good thing. We continue to focus on the long haul with our processes, and we’re viewing the sell-off as profit taking, for the most part. — In the near term, the markets will also have to digest some speculators betting on mean reversion between “value” (cyclical) versus “growth” (secular), but we maintain the view that the value-versus-growth conversation is largely nonsense (see block quotes below), and mean reversion is something akin to the gamblers’ fallacy, in my humble opinion. Investors should also continue … Read more

Digital Realty Trust is Holding Up Quite Well

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Image Shown: Shares of Digital Realty Trust Inc, a holding in both our Dividend Growth Newsletter and High Yield Dividend Newsletter portfolios, have outperformed the S&P 500 (SPY) by a wide margin over the past year and that’s before taking dividend considerations into account. By Callum Turcan On May 7, the data center real estate investment trust (‘REIT’) Digital Realty Trust Inc (DLR) reported first-quarter 2020 earnings. Though the firm’s near-term guidance disappointed investors, management communicated that the medium- and long-term trajectory of Digital Realty’s financial and operational performance remained strong. Furthermore, its liquidity position and its dividend coverage continued to be rock-solid, particularly after factoring in the data center REIT’s ongoing access to equity markets and lack of near-term … Read more