Is Empire State Realty Trust (ESRT) A Smart Long-Term Buy?

Longleaf Partners Small-Cap Fund, an independent investment management firm, published its fourth quarter 2020  investor letter – a copy of which can be downloaded here. A return of 17.56% was recorded by the fund in the fourth quarter of 2020, below its Russell 2000 benchmark that delivered a 31.37% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Longleaf Partners Small-Cap Fund, in their Q4 2020 investor letter, mentioned Empire State Realty Trust, Inc. (NYSE: ESRT) and emphasized their views on the company. Empire State Realty Trust, Inc. is a US-based real estate investment trust company that currently has a $3.2 billion market capitalization. Since the beginning of the year, ESRT delivered a 20.49% return, extending its 12-month gains to 28.64%. As of March 26, 2021, the stock closed at $11.23 per share.

Here is what Longleaf Partners Small-Cap Fund has to say about Empire State Realty Trust, Inc. in their Q4 2020 investor letter:

“Empire State Realty Trust (ESRT) (-15%, 0.11%; 52%, 2.32%), the New York City property owner, was another top contributor in the quarter. The stock nearly doubled within a month in 4Q following the announcement of Pfizer’s COVID vaccine efficacy. COVID has presented new challenges to the NYC office market, but we believe they are more than reflected in the stock’s still heavily discounted price. Empire State Building office space is 88% occupied, the company repurchased some shares when they were very cheap earlier this year, and a strong balance sheet will allow owner-operator CEO Tony Malkin to go on offense opportunistically should his peers run into financial distress. Visitors to the Empire State Building’s Observatory, an excellent money-maker in normal times, are minimal but are likely to begin a strong recovery in 2021.”

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Our calculations show that Empire State Realty Trust, Inc. (NYSE: ESRT) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Empire State Realty Trust, Inc. was in 13 hedge fund portfolios, compared to 17 funds in the third quarter. ESRT delivered an 18.34% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.