Franklin Street Properties

Ticker: FSP, Buy below $12.

Why I Would Buy

  1. Cheap– Franklin Street Properties is trading at just 11 times forward FFO (free flow from operations).
  2. Dividend – FSP yields over 7%, while the FFO payout ratio hovers around a healthy 75%.
  3. Credit Rating – FSP enjoys investment grade ratings.
  4. Insider Buying – Managers and directors at Franklin Street purchased 150,000+ shares during the past 12 months, of which 131,275 were purchased during the past 3 months. No shares were sold by insiders during this period.

What Could Go Wrong

  1. Hurricanes Harvey and Irma – Houston is one of the key markets for Franklin Street, and they own properties in Miami and Atlanta too. Therefore, the impact of Harvey and Irma on FSP’s cash flow is indeterminate at this point.

Disclosure: I am long FSP, please read additional disclosures here before taking any action based on this post.

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