We have a Black Book scheduled for Thursday, 10/7 but are taking an opportunity this morning to add COLD as a new Best Idea Short following a 15% reduction to FY21 AFFO guidance just announced on significantly higher labor costs. Labor represents ~66% of COLD's cost structure within the same-store pool, and we significant downside risk to FY22 estimates as well as ~20% downside risk in shares to the mid-to-high $20/share range with limited upside from here. Given that there are several weeks before our presentation, we don't want to leave any alpha on the board and recommend paying attention to Keith's signals in building a short position, as shares will no doubt be weak in the near-term.
More to come...
Figure 1: Hedgeye REITs Position Monitor
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
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