Cartoon of the Weekend: Outpacing
Tickers: UHAL
Subsector: Self-Storage
Headline: 4Q22 earnings call notes
- Last week Best Idea Short Amerco (UHAL) closed out earnings season for us, so we wanted to follow up with some key takeaways from the conference call for what we thought was a worse than expected quarter for a name at peak earnings heading deeper into a RoC deceleration in Quad 4.
- Separately, for anyone going to the June NAREIT conference 6/7-9, on Wednesday, 6/8 blow off your 3pm+ meetings and come join us at the Hilton Hotel bar for a SHIFT! We'll have a tab open. Calendar Invite.
- On self-storage if UHAL "had more product they could probably rent it" at historically high rates. They are continuing to pursue conversion and ground up development projects, and have effectively pre-funded development activity with a portion of the ~$2.6 billion of cash on the balance sheet (vs. a ~$10 billion equity market cap) reserved to deploy into the space. We think we are probably about ~2 years away from really having to worry about the development cycle kicking in with deliveries of new competing assets that typically have a long lead time (3+ years) to stabilize.
- On equipment rental revenue, the rate of transaction growth has moderated as UHAL progressed through the first 4-5 months of the year. Again, Quad 4 slowdown no doubt tied in part to consumer spending and housing. Management noted the rate of increases in moving & storage revenue will probably return to pre-COVID levels, which most likely means there will be transaction count and revenue dollar declines, despite rates being reset higher, prior to that return to trend growth. That is why we are short. When fuel costs are up and consumer and housing sentiments are down, the business will typically see shorter-distance/fewer out-of-state moves which results in lower transaction value. This higher transaction value is exactly what drove earnings to peak levels through COVID, and that is now reversing.
- Projecting about ~$1.8bn of gross equipment purchases in the current fiscal year, so as we had mentioned much of the ~$2.6 billion cash balance is earmarked.
- Seeing inflation impact both wages and the cost of new equipment, partially offset by rising rates in self-storage (<30% of revenues and close to ~50% of EBITDA on our estimates), so we expect and have modeled in overall margin compression from here.
- Next week we will be doing another update on Best Idea Short MPW, this time on key operator Prospect Medical.
Figure 1: Google Search Frequency No Longer Making Higher-Highs
Source: trends.google.com
First iteration of weekly Hedgeye REITs Valuation Handbook to be released weekly on Fridays going forward for institutional subscribers.
Figure 2: Updated Position Monitor
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Source: Company reports, FactSet, Hedgeye
Figure 3: Updated Sentiment Monitor
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Source: Company reports, FactSet, Hedgeye
Figure 4: REIT Style Factor Exposure Performance
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Source: Company reports, FactSet, Hedgeye
Prior Notes:
5.26.22 - UHAL F4Q22 RESULTS - BIG OOF ON DIY | 5.26.22 | (UHAL)
5.25.22 - REITS DAILY BRIEF | 5.25.22 | (MPW MUST LIVE ON ANOTHER PLANET)
5.24.22 - REITS DAILY BRIEF | 5.24.22 | (REMOVING COLD FROM BEST IDEA SHORT)
5.22.22 - SUNDAY NIGHT REIT READ | 5.22.22 | (OFC, STYLE FACTORS)
5.20.22 - REITS DAILY BRIEF | 5.20.22 | (MPW)
5.18.22 - REITS DAILY BRIEF | 5.18.22 | (POSITION MONITOR UPDATE)
5.17.22 - REITS DAILY BRIEF | 5.17.22 | (MPW)
5.16.22 - SUNDAY NIGHT REIT READ, A LITTLE LATE | 5.16.22 | (CUBE, PSA, EXR, LSI, UHAL)
5.12.22 - REITS DAILY BRIEF | 5.12.22 | (APARTMENT RENT TRACKER)
5.10.22 - RADI 1Q22 RESULTS | TIMING IMPACT DRAG; POTENTIAL DEAL ALL THAT MATTERS | 5.10.22 | (RADI)
5.8.22 - SUNDAY NIGHT REIT READ | 5.8.22 | (RADI)
5.6.22 - COLD 1Q22 RESULTS | SETTING UP ANOTHER GUIDANCE CUT? | 5.6.22 | (COLD)
5.5.22 - REITS DAILY BRIEF | 5.5.22 | (HR/HTA/WELL, LSI, NSA)
5.4.22 - REITS DAILY BRIEF | 5.4.22 | (EXR/PSA 1Q22 RESULTS)
5.3.22 - REITS DAILY BRIEF | 5.3.22 | (HR, HTA)
5.1.22 - SUNDAY NIGHT REIT READ | 5.1.22 | (AMH, MPW)
4.29.22 - MPW HEARING FOOTSTEPS? | 4.29.22 | (MPW)
4.28.22 - AVB 1Q22 RESULTS | BIG BEAT DIDN'T HAPPEN, BUT FY22 OUTLOOK RAISED | 4.28.22 | (AVB)
4.27.22 - INVH 1Q22 RESULTS | ROC ROLLING OVER EVERYWHERE | 4.27.22 | (INVH, AMH)
4.26.22 - EQR 1Q22 RESULTS | DISAPPOINTING QUARTER | 4.26.22 | (EQR)
4.26.22 - REITS DAILY BRIEF | 4.26.22 | (AVB 1Q22 PREVIEW)
4.25.22 - REITS DAILY BRIEF | 4.25.22 | (EQR 1Q22 PREVIEW)
4.24.22 - SUNDAY NIGHT REIT READ | 4.24.22 | (AMH, INVH, TCN)
4.22.22 - EVENT REPLAY: MPW BEST IDEA SHORT BLACK BOOK (MPW)
4.21.22 - REITS DAILY BRIEF - LATE EDITION | 4.21.22 | (MPW)
4.19.22 - REITS DAILY BRIEF | 4.19.22 | (PLD 1Q22 RESULTS)
4.17.22 - SUNDAY NIGHT REIT READ | 4.17.22 | (MPW)
4.13.22 - REITS DAILY BRIEF | 4.13.22 | (OFFICE UTILIZATION)
4.12.22 - EVENT INVITE | MEDICAL PROPERTIES TRUST (MPW) BLACK BOOK | THURSDAY, 4/21 @ 10:00AM ET
4.10.22 - SUNDAY NIGHT REIT READ | 4.10.22 | (MACRO STYLE FACTORS)
4.8.22 - REITS DAILY BRIEF | 4.8.22 | (PLD)
4.7.22 - REITS DAILY BRIEF | 4.7.22 | (OFFICE UTILIZATION, PGRE)
4.5.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 4.5.22 | (AMH, MAA, MPW)
4.3.22 - SUNDAY NIGHT REIT READ | 4.3.22 | (CXW)
4.1.22 - REITS DAILY BRIEF | 4.1.22 | (CPT, INVH)
3.31.22 - REITS DAILY BRIEF | 3.31.22 | (APARTMENT RENT TRACKER)
3.30.22 - REITS DAILY BRIEF | SELF-STORAGE ASSUMPTIONS | 3.30.22 | (CUBE, EXR, LSI, NSA, PSA)
3.27.22 - SUNDAY NIGHT REIT READ | 3.27.22 | (CXW, INVH, ONL, WE)
3.22.22 - REITS DAILY BRIEF | PGRE REJECTS MONARCH OFFER | 3.22.22 | (PGRE)
3.20.22 - SUNDAY NIGHT REIT READ | 3.20.22 | (INVH)
3.18.22 - REITS DAILY BRIEF | COLD REMAINS TOP SHORT IDEA | 3.18.22 | (COLD)
3.16.22 - REITS DAILY BRIEF | SFR ASSUMPTIONS SHEET | 3.16.22 | (AMH, INVH)
3.15.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.15.22 | (SUI)
3.13.22 - SUNDAY NIGHT REIT READ | 3.13.22 | (INVH)
3.11.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.11.22 | (WE)
3.9.22 - REITS DAILY BRIEF | 3.9.22 | (OFFICE UTILIZATION)
3.8.22 - REITS DAILY BRIEF | 3.8.22 | (APARTMENT RENT TRACKER, AMH, INVH, TCN, ILPT)
3.6.22 - SUNDAY NIGHT REIT READ | 3.6.22 | (WE)
3.4.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.4.22 | (WE)
3.4.22 - REITS DAILY BRIEF | 3.4.22 | (RADI MODEL UPDATE)
3.1.22 - REITS DAILY BRIEF | 3.1.22 | (WE)
3.1.22 - FOLLOWING UP W/ ADDITIONAL THOUGHTS ON HR | 2.28.22 | (HR, HTA)
2.28.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.28.22 | (HR, HTA)
2.27.22 - SUNDAY NIGHT REIT READ | 2.27.22 | (HR, HTA)
2.26.22 - UPDATE FOLLOWING MONARCH BID | POSITION MONITOR UPDATE | 2.26.22 | (PGRE)
2.24.22 - REITS DAILY BRIEF | 2.24.22 | (COLD 4Q21 RESULTS)
2.24.22 - UPDATE ON INVH COURT CASE | 2.24.22 | (INVH)
2.24.22 - REITS DAILY BRIEF | 2.24.22 | (PGRE)
2.23.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.23.22 | (INVH, COLD)
2.20.22 - SUNDAY NIGHT REIT READ (A LITTLE EARLY FOR FUN!) | 2.20.22 | (INVH SHORT)
2.17.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.17.22 | (INVH)
2.16.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.16.22 | (UHAL)
2.15.22 - INVH 4Q21 RESULTS | JUST NOT ENOUGH | 2.15.22 | (INVH)
2.13.22 - SUNDAY NIGHT REIT READ - SUPER BOWL EDITION | 2.13.22 | (UHAL)
2.11.22 - REITS DAILY BRIEF | 2.11.22 | (OFC 4Q21 RESULTS)
2.10.22 - REITS DAILY BRIEF | 2.10.22 | (REXR 4Q21 FOLLOW-UP)
2.9.22 - REXR'S FY22 OUTLOOK DISAPPOINTING | 2.9.22 | (REXR)
2.9.22 - REITS DAILY BRIEF | 2.9.22 | (EGP)
2.8.22 - REITS DAILY BRIEF | 2.8.22 | (REXR, APARTMENT RENT TRACKER)
2.6.22 - SUNDAY NIGHT REIT READ | 2.6.22 | (RADI)
2.4.22 - EVENT REPLAY | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK
2.2.22 - AVB FY22 GUIDANCE CONSERVATIVE | 2.2.22 | (AVB)
2.1.22 - EQR 4Q21 EARNINGS BEAT | 2.1.22 | (EQR)
1.31.22 - POSITION MONITOR UPDATE | 1.31.22 | (O, NNN, WY, CUBE, LSI)
1.30.22 - SUNDAY NIGHT REIT READ | 1.30.22 (AVB, EQR, WE)
1.27.22 - EVENT INVITE | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK | FRIDAY, 2/4 @ 10:00AM ET
1.27.22 - REITS DAILY BRIEF | 1.27.22 | (OFC)
1.26.22: REITS DAILY BRIEF PART II | 1.26.22 | (RADI)
1.26.22 - REITS DAILY BRIEF | 1.26.22 | (COLD)
1.25.22 - REITS DAILY BRIEF | 1.25.22 | (APARTMENTS, OFFICE UTILIZATION)
1.25.22 - Will $MSTR Be Forced To Sell Their Bitcoin? (Bonus)
1.23.22 - SUNDAY NIGHT REIT READ | 1.23.22
1.22.22 - REITS DAILY BRIEF | 1.21.22 | (COLD)
1.21.22 - REITS DAILY BRIEF | 1.19.22 | (AMH, WE)
1.19.22 - REITS DAILY BRIEF | 1.19.22 | (PLD, COLD)
1.17.22 - MONDAY NIGHT HOLIDAY REIT READ | 1.17.22 (RADI, PLD)
1.12.22 - REITS DAILY BRIEF | 1.12.22 | (APARTMENT RENT TRACKER)
1.11.22 - REITS DAILY BRIEF | 1.11.22 | (POSITION MONITOR UPDATE)
1.10.22 - REITS DAILY BRIEF | 1.10.22 | (WE, REXR)
1.9.22 - SUNDAY NIGHT REIT READ | 1.9.22
1.6.22 - REITS DAILY BRIEF | 1.6.22 | (PSA, POSITION MONITOR)
1.5.22 - ESRT <--> PGRE: A WIN-WIN ALL AROUND? | 1.5.22 | (ESRT, PGRE)
1.4.22 - REITS DAILY BRIEF | 1.4.22 | (PGRE)
1.3.22 - REITS DAILY BRIEF | 1.3.22 | (POSITION MONITOR UPDATE, PGRE)
12.29.21 - REITS DAILY BRIEF | 12.29.21 | (Position Monitor, TCN, DLR, EQIX, ELS, SUI)
12.23.21 - REITS DAILY BRIEF | 12.23.21 | (AVB, CPT, EQR, MAA)
12.21.21 - REITS DAILY BRIEF | 12.21.21 | (BRG, U.S. OFFICE UTILIZATION)
12.19.21 - SUNDAY NIGHT REIT READ | 12.19.21 | (PSA)
12.17.21 - REITS DAILY BRIEF | 12.17.21 | (Storage, Manhattan Office)
12.16.21 - REITS DAILY BRIEF | 12.16.21 | (FR)
12.15.21 - EVENT REPLAY | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI
12.14.21 - REITS DAILY BRIEF | 12.14.21 | (U.S. OFFICE UTILIZATION)
12.12.21 - SUNDAY NIGHT REIT READ | 12.12.21 | (WE)
12.11.21 - EVENT REMINDER | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI
12.10.21 - REITS DAILY BRIEF | 12.10.21 | (ESRT)
12.8.21 - REITS DAILY BRIEF | 12.8.21 | (APARTMENT RENT TRACKER, U.S. OFFICE UTILIZATION)
12.7.21 - REITS DAILY BRIEF | 12.7.21 | (SLG)
12.6.21 - REITS DAILY BRIEF | 12.6.21 | (WE NOVEMBER OPERATIONS UPDATE)
12.5.21 - SUNDAY NIGHT REIT READ | 12.5.21 | (PGRE, EGP, PLYM, MAA, CPT, O, EPR)
12.2.21 - REITS DAILY BRIEF | 12.2.21 | (WE)
12.1.21 - IGNORE CNBC RE: WEWORK RESTATEMENT | 12.1.21 | (WE)
12.1.21 - REITS DAILY BRIEF | 12.1.21 | (U.S. OFFICE UTILIZATION, WE)
11.30.21 - REITS DAILY BRIEF | 11.30.21 | (AMH)
11.28.21 - SUNDAY NIGHT REIT READ | 11.28.21 | (COLD)
11.23.21 - REITS DAILY BRIEF | 11.23.21 | (U.S. OFFICE UTILIZATION, WE)
11.21.21 - SUNDAY NIGHT REIT READ | 11.21.21 | (WE)
11.19.21 - REITS DAILY BRIEF | 11.19.21 | (CUBE)
11.17.21 - REITS DAILY BRIEF | 11.17.21 | (STYLE FACTOR WORK)
11.16.21 - REITS DAILY BRIEF | 11.16.21 | (U.S. OFFICE UTILIZATION)
11.15.21 - CUBE ANNOUNCES STABILIZED ACQUISITION | 11.15.21
11.15.21 - REITS DAILY BRIEF | 11.15.21 | (WE, ILPT)
11.14.21 - SUNDAY NIGHT REIT READ | 11.14.21 | (CUBE, EXR, LSI, NSA)
11.11.21 - REITS DAILY BRIEF | 11.11.21 | (LSI, NYC CBD OFFICE)
11.10.21 - REITS DAILY BRIEF | 11.10.21 | (UHAL, CONE, COR, NSA, PSA)
11.9.21 - REITS DAILY BRIEF | 11.9.21 | (U.S. OFFICE UTILIZATION, SFR)
11.7.21 - SUNDAY NIGHT REIT READ | 11.7.21 | (APARTMENT RENTAL RATE TRACKER, POSITION MONITOR UPDATE)
11.4.21 - REIT RECAP | 11.4.21 | AMH 3Q21 RESULTS
11.4.21 - REIT RECAP | 11.4.21 | CUBE 3Q21 RESULTS
11.4.21 - REITS DAILY BRIEF | 11.4.21 | (COLD, IRM, EARNINGS SURPRISE MONITOR)
11.3.21 - REITS DAILY BRIEF | 11.2.21 | (LSI, POSITION MONITOR UPDATE)
11.2.21 - REITS DAILY BRIEF | 11.2.21 | (PSA, U.S. OFFICE UTILIZATION)
11.1.21 - REIT RECAP | 11.1.21 | PSA 3Q21 RESULTS
10.31.21 - SUNDAY NIGHT REIT READ | 10.31.21 | (3Q21 EARNINGS SURPRISES, POSITION MONITOR)
10.28.21 - REIT RECAP | 10.28.21 | CPT 3Q21 RESULTS
10.28.21 - REITS DAILY BRIEF | 10.28.21 | (EXR)
10.28.21 - REIT RECAP | 10/28/21 | INVH 3Q21 RESULTS
10.28.21 - REIT RECAP | 10/27/21 | AVB 3Q21 RESULTS
10.27.21 - REITS DAILY BRIEF | 10.27.21 | (3Q21 Earnings, AVB, EXR, Office)
10.26.21 - REIT RECAP | 10/26/21 | EXR 3Q21 RESULTS
10.26.21 - REITS DAILY BRIEF | 10.26.21 | (EQR, REXR)
10.25.21 - SUNDAY NIGHT REIT READ | 10.24.21 | (POSITION MONITOR)
10.21.21. - REIT RECAP | 10/21/21 | REXR 3Q21 RESULTS
10.20.21 - REITS DAILY BRIEF | 10.20.21 | (EGP, PLYM, REXR, ILPT)
10.19.21 - VIDEO | American Homes 4 Rent (AMH) Thesis
10.19.21 - REITS DAILY BRIEF | 10.19.21 | (COLD, SLG, VNO, AMH, U.S. Office Utilization)
10.18.21 - REITS DAILY BRIEF | 10.18.21 | (PLD)
10.17.21 - SUNDAY NIGHT REIT READ | 10.17.21 | (PLD, POSITION MONITOR)
10.15.21 - REIT RECAP | 10/15/21 | PLD 3Q21 RESULTS
10.13.21 - REITS DAILY BRIEF | 10.13.21 | (PLD)
10.10.21 - SUNDAY NIGHT REIT READ | 10.10.21 | (POSITION MONITOR UPDATE)
10.8.21 - BLACK BOOK ROUND-UP | AMERCO (UHAL)
10.7.21 - BEST IDEA ROUND-UP | AMERICOLD REALTY TRUST (COLD)
Please e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
