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Biotech / Medical : Trickle Portfolio
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To: tuck who wrote (967)12/21/2001 10:27:03 AM
From: tuck  Read Replies (2) of 1784
 
Trickle has been checking out ARE. REITs do well in falling interest rate environments as it lowers their cost of capital. The yield is OK in the middle 4% range. They don't keep much cash on hand, but they have a financing facility. They're a bit close to using it all. I could see a small issuance of stock in '02, as there was in '00.

Real estate bubbles tend to burst roughly three years after stock market bubbles (folks will sell stocks before they sell their houses). But the demand for lab space is strong. Indeed, ARE's lab spaces are 100% leased. The parts that aren't leased are office and warehouse spaces that came with the buildings. Their P/E is bit rich for an REIT, but their growth more than justifies it. Further, I doubt lab real estate is going to do any bursting.

They have no website --which would be silly for an REIT to have -- so research is done via EDGAR. Here's the link to the most recent 10-K:

sec.gov

Trickle views todays minor weakness as an op and buys 100 shares at the current ask of $40.28. Should it dip on a financing, trickle will likely get another chunk, depending on the cash position.

Some day soon, I'll go back and figure out the whole dividend thing. With ARE in the portfolio, that issue becomes more than actaully takes on a little weight.

Thanks to Wilder for pointing out this unusual trickle outfit.

Cheers, Tuck
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