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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (36870)	3/6/2010 1:45:57 PM
From: Spekulatius	of 78633

Maybe you do some further research before selling HPT - with a 10x EBITDA valuation it is selling at a decent discount to other hotel REITs. if I were to value HPT I'd first break down the business into the Hotels and into the T rent component and get the EBITDA numbers for each part. Then take the TA EBITDA number and apply a discount (pick you number - I'd say 30%) and calculate what the "normalized EBITDA number for HPT would look like.. if yopu like this noe "normalized " valuation there is no reason to sell. Both HPT and HRP (and spinoff GOV) are run by and outside management company. They take their cut based on managed assets so they have an incentive to issue more equity. What they did not do is load up the their entities with too much debt - their kept the 1L1 Debt/Euqity ratio pretty much constant. That really helped through the credit crunch. other than that, i think they are mediocre managers - just look at HRP LT record before 2008. ALl, imo. It would be great if you could post the numbers on this board. It will take probably 1h to get and double check it - if I had more interest in HPT, I would do it myself.

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