We recently published a list of 10 Most Undervalued REIT Stocks to Invest In Now. In this article, we are going to take a look at where VICI Properties Inc. (NYSE:VICI) stands against other most undervalued REIT stocks to invest in now.
Where is the Real Estate Sector Heading?
According to the National Association of Realtors, sales of previously owned homes in February increased 4.2% from January while they were 1.2% lower year-over-year. Home buyers are slowly moving into the market although mortgage rates have not changed much. Although the market is still tight, it is witnessing more inventory and choices, with the inventory at February end standing at 1.24 million units thereby representing a 17% rise year-over-year. The tight supply is still driving home prices up since the median price of a home sold in the month of February was 3.8% higher, as compared to last year.
Lawrence Yun, NAR’s chief economist, previously appeared on CNBC to give insights on the state of the housing market. In his opinion, if inflation comes down due to deregulation policies despite the tariff conditions or more home construction occurs with the federal government opening up for more development, the market might see lower mortgage rates along with the Fed rate cut. Simultaneously, the Federal Reserve decided to hold the interest rates steady amidst uncertainties around tariffs.
Logan Mohtashami, HousingWire lead analyst, thinks the cure for tariffs is lower mortgage rates. In an interview with CNBC, he said that if mortgage rates go down and new home sales start to grow, the builder would find a way to sell homes and build homes. Although builder sentiment has recently fallen considering their profit margins are stressed amidst tariffs, this sentiment tends to increase with rates going down.
Our Methodology
In order to compile a list of the 10 most undervalued REIT stocks to invest in now, we first used a stock screener to shortlist REIT stocks trading at a forward P/E of less than 15, as of March 25. From this list, we selected the top 10 stocks with the highest number of hedge fund holders, as of Q4 2024. The 10 most undervalued REIT stocks to invest in now have been arranged in ascending order of the number of hedge funds that disclosed stakes in them at the end of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A business executive in a sharp suit shaking hands on a real estate deal.
VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 48
Forward P/E: 11.44
VICI Properties Inc. (NYSE:VICI) is an experiential real estate investment trust that is one of the largest owners of gaming, hospitality, and entertainment destinations in the United States. The S&P 500 experiential REIT owns 93 experiential assets comprising 54 gaming properties and 39 other experiential properties across the United States and Canada. The firm’s properties are occupied by industry-leading leisure, gaming, and hospitality operators under long-term, triple-net lease agreements.
As compared to other traditional net lease real estate investment trusts, the firm’s assets have high barriers to entry and high financial transparency. With demand currently inclining towards developments that tend to blend luxury, hospitality, and experience, VICI Properties Inc. (NYSE:VICI) recently made a strategic move giving it an opportunity to invest in place-based history and experiential luxury. On February 19, the REIT announced a strategic relationship with Cain International and Eldridge Industries, a collaboration that launched with VICI’s $300 million investment into a mezzanine loan related to the development of a landmark 17.5-acre luxury mixed-use development ‘One Beverly Hills’. This strategic move took place subsequent to the end of the fourth quarter of 2024, during which the REIT’s total revenue rose 4.7% year-over-year while AFFO rose 5.4% year-over-year.
Overall, VICI ranks 1st on our list of most undervalued REIT stocks to invest in now. While we acknowledge the potential of VICI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than VICI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center