First stock in the clip. At this point BNN's videos aren't working so can't post the top picks link but this clip gives you all you need. GLTA
BSR Real Estate Investment Trust (HOM-U TSX)
$0.7B market cap, 4.5 per cent yield, US$11.15 close
BSR owns 7,900 suites in 27 properties, concentrated within the suburbs of Dallas (30 per cent of suites), Austin (20 per cent), Houston (20 per cent) and Oklahoma City (13 per cent).
BSR Real Estate Investment Trust is a Canadian-listed REIT that primarily owns and operates Class B garden-style assets that cater to residents seeking “work-force” or affordable housing and select Class A assets in the U.S. Sun Belt.
The REIT possesses strong ownership alignment and experience from its management team, combined with a deep “bench” of onsite and regional managers, executing a laser-focused value add program.
Fundamentals in the REIT’s core markets continue to be sound. BSR reported 4.9 per cent same store NOI growth during its third quarter, one of the highest amongst its peer group. Reflecting stable fundamentals and record low interest rates, recent transactions in BSR’s core markets suggest that valuations for comparable assets have actually risen since the pandemic began. BSR is currently trading at an implied cap rate of 6.1 per cent, compared to recent comparable transactions in the mid 4.0 per cent cap rate range.
Even if the REIT were to trade at a 5.0 per cent cap rate, its unit price would be US$16.17, 45 per cent higher than its current price. The historically narrow cap rate spread between primary and secondary markets has benefited BSR’s capital recycling program in which the REIT is selling its non-core properties in tertiary markets with below average growth profiles and rotating into higher growth markets such as Austin, Dallas, and Houston, Texas. During the quarter, the REIT completed US$260 million of asset sales at approximately a 10 per cent premium to the REIT’s IFRS values and subsequently used the sales proceeds to transact on US$129 million of acquisitions in Dallas and Houston.
BSR is set up for a strong year in 2021, with consensus funds from operations (“FFO”) per unit growth expected to increase by 11.0 per cent. Despite one of the strongest earnings growth profiles in the apartment sector, units of BSR are trading at a 12 per cent discount to their (understated) IFRS NAV and a 15 per cent discount to Vision’s current NAV estimate of US$13.11 per unit.
PAST TOP PICK
BSR REIT
(HOM.UN-T)
January 28, 2021
(A Top Pick Mar 05/20, Down 15%) He's still buying it today. Affordable apartments in the US. Navigated well through the pandemic. Cheap stock, well situated.
Andrew Moffs
Price
$14.400
Owned
Yes
TOP PICK
BSR REIT
(HOM.UN-T)
January 28, 2021
A way to diversify away from Canadian markets, but still listed on the TSX. Cheap. Lots of upside. Great job of recycling their portfolio. Great chance to buy a smaller, higher growth REIT. Yield is 4.54%. (Analysts’ price target is $16.19)
Andrew Moffs
Price
$14.400
Owned
Yes