What Changed?:
- On Friday, 10.8 we added AMERCO (UHAL) to the Best Idea Long list, as the stock (1) has the strongest Bullish Trade/Trend signal of all the names on the Position Monitor, (2) is a great Quad 2 stock (Figure 3 below), and (3) we were probably too conservative on the Equipment Rental segment (now valued at 7x NTM EBITDA) and see upside to above $800/share (Figure 4 below).
- We are effectively overweight self-storage with Best Idea Long calls on CUBE, PSA and UHAL.
- On the other side we are effectively short Industrial/Warehouse among our Best Idea Short call on COLD, as well as several Short Bench names while in Quad 2. The style factors are simply not optimal for Industrial/Warehouse on the long side in Quad 2.
Figure 1: Hedgeye REITs Position Monitor
Figure 2: REITs Sentiment Score
Figure 3: UHAL GIP Quad Backtest
Figure 4: Updated UHAL Sum-of-the-Parts (SOTP)
Please e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs