Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hersha Hospitality Trust: Institutions Believe In This Hotel REIT

Hersha Hospitality Trust: Institutions Believe In This Hotel REITHersha Hospitality Trust (NYSE:HT) is trading around $4.84 versus its 52-week range of $3.74-$5.91, up 30% in the last 1 year. The stock yields 4.9% versus the peer median of 2%. Its competitor Ashford Hospitality Trust, Inc. (NYSE:AHT) yields 5.29%, and Host Hotels and Resorts Inc (NYSE:HST) yields 2%

As of 6/29/2012, the top institutional holders of Hersha Hospitality Trust stock are Jennison Associates (4%), Columbia Partners (4%) BlackRock Institutional (3%), Nuveen Asset Management (3%), and State Street Corporation (3%).

For those of you looking for additional stocks with institutional interest, please read here.

Fundamentals that support institutional support:

Hersha has a conservative balance sheet with $33 million in cash & cash equivalents, and $220 million available borrowings under its revolving credit facility issued by TD Bank. The credit facility has various covenants, and the company is in compliance with each of the covenants as of June 30, 2012.

The company’s recent acquisition of the remaining 50% interest in the Courtyard Ewing further simplifies the company’s structure considering most of the hotels were already consolidated.

Hersha continues to have one of the fastest growing portfolios given its focus on strong urban markets.

NYC provides a significant growth opportunity for the company. Both the Hyatt in Union square, and the Hampton Inn on Pearl Street will add significantly to the EBITDA.

Hersha recently closed a sale of 18 non-core properties resulting in higher EBITDA margins and lower leverage for the entire portfolio. Net proceeds from the sale were $55 million, and consolidated mortgage debt reduction was $61 million.

The chart below compares share performance over the past year. “D”s mark dividends paid. (click to enlarge)

Hersha Hospitality Trust: Institutions Believe In This Hotel REIT

Conclusion: The yield on the stock seems attractive for a REIT with a small concentrated portfolio in a growing market.

Risk associated with investing in the name remains the EBITDA concentration in the NY market.

This article was originally written by Sabina Bhatia, and posted on Kapitall.

Loading Comments...