I'd like to make the investment case that the common shares of Mid-America Apartments(MAA-$26), on a yield basis, are priced much cheaper than its peers. It is now yielding 9%, while many of the others are yielding 6-7%.
Don't think this disparity makes sense at all.
Management and assets at MAA are first class. For instance, Warren Buffett's legendary old friend and hero, Jack Byrne, formerly head of GEICO and Fireman's Fund, was a director here until he retired a year or so ago. The founder, George Cates, just retired as CEO in October. These are quality people.
Quibbling over FFO pennies, etc., doesn't really explain it.
Management makes a compelling case that the intrinsic asset value is easily a few bucks higher than the current stock price. (Management posts often and openly at the MAA Yahoo message board).
With investors desperately seeking high yields these days, it seems likely that MAA will climb higher as investors take advantage of one of the only 9% yields around.
And, they don't have to accept high risks or low quality to get it.
I've been a bull in this co. for a couple of years, and it has paid well. The preferreds have come all the way from mid-teens to mid-twenties over the past year, and are now fully priced at par.
The common is all that is still underpriced, IMO.
I am still buying the common stock, even though it is up a few points this year. It likely has another five points in it, and you get the 9% while you wait.
Anyone know of a better deal in the REIT patch?
FWIW |
