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Thread: Nice Find OR Stay Away?

  1. #1

    Nice Find OR Stay Away?

    I'm always leery of stocks that seem very undervalued. I always wonder: Have I stumbled on a great find OR is there a reason that everyone else sees to stay away from this stock but I just don't see it?

    Here's one of them:

    Ashford Hospitality Trust (AHT)
    - Forward P/E = 5.39
    - Price/Book = 0.87
    - Pays 5.6% dividend

    So... You make the call!

  2. #2
    If it's a REIT the first two ratios mean almost nothing, and the last only has meaning in connection with an evaluation of the free cash flow and the operating philosophy of the company. Note that a REIT has to pay out 90% of earnings as a dividend, so yields will almost always be high, but growth potential is limited because they can only generate by adding debt or issuing more stock.
    “Maybe you shouldn't dress like that.”

    “This is a blouse and skirt. I don't know what you're talking about.”

    “You shouldn't wear that body.”

  3. #3
    AHT is 377 million in debt and is planning on selling its select service hotel portfolio. The only problem is how they end up selling these, imo.

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