Ticker: HT, Buy below $20.
Hersha Trust is a REIT that owns and operates upscale hotesl in United States .
Why I Would Buy
- Cheap – Hersha Trustcurrently sells at 8x trailing and forward AFFO (Adjusted Free Flow from Operations).
- Insider Buying – Strong insider buying during last last 12 months. No insiders have sold last 3 months.
- Dividend – 7%+ yield.
- Insider Holding – More than 10% of the outstanding units are held by insiders
- Low Dividend Payout – Less than 70% of AFFO paid out as dividends.
What Could Go Wrong
- High Debt – Debt-to-Equity at 1.39, several high yield preferred securities are outstanding.
- Risky Market Segment – Luxury hotel occupancies are highly sensitive to the health of economy.
- Interest Rates – Interest rates moving up will likely hurt all leveraged REITs including HT.
Disclosure: I am long HT, please read additional disclosures here before taking any action based on this post.