In the current issue of Barron’s they have a feature article and interview with 12 very prominent Wall Street strategists. Larry Adams (Deutsche Bank), Richard Bernstein (Merrill Lynch), Abhikut Chakrabortti (JP Morgan), Abby Joseph Cohen (Goldman Sachs), Ed Keon (Prudential), Tobias Levkovich (Citigroup), Tom McManus (Banc of America) , Henry McVey (Morgan Stanley) , Michael Ryan (UBS), Liz Ann Sonders (Schwab), Francois Trahan (Bear Stearns) & Jason Trennert (Strategas Research Partners).
Basically, this group sees stocks as not been very robust for the rest of the year, but with interest rates being low, they see a brighter investment future for stocks in 2007. What is interesting about this interview and where the group is suggesting investment money should go in the interim is that all, with the exception of Richard Bernstein and Abby Joseph Cohen, have health care on their list of favorite sectors. More amazing is that nine of them have health care as their #1 sector, with only Abhikit Chakrabortti having it fourth on his list.
I assume that most investors already have stocks in their portfolios that include either biotechs or big pharmas. That is good! However, with the uncertainty that I think is facing the market in the near term, the way I would play this issue is by buying shares of BioMed Realty Trust (BMR). You have a cushion with the near 4% current dividend and the likely increased rate that one should expect in the future, based on their earnings growth.
In uncertain times, it’s the stodgy stocks with growth revenue and earnings based on demographic needs that often win out in the end!
About BioMed Realty Trust
BioMed Realty Trust, Inc. is a real estate investment trust (REIT) focused on Providing Real Estate to the Life Science Industry(TM). The company's tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry, and its properties and primary acquisition targets are generally located in markets with well established reputations as centers for scientific research, including Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey. BioMed's real estate portfolio consists of 50 properties, representing 86 buildings with approximately 7.5 million rentable square feet in each of the major life science markets in the United States. Additional information is available at www.biomedrealty.com.
Highlights:
* Quarterly total revenues increased 73.3% to $49.5 million from $28.5
million in the second quarter 2005
* Quarterly funds from operations (FFO) per diluted share increased 41.4%
to $0.41 per share versus the second quarter 2005
* Total assets increased 36.2% to $1.8 billion from June 30, 2005
* Acquisition of over $463 million of office and laboratory space,
representing approximately 1.1 million square feet, including the Human
Genome Sciences, Inc. headquarters and manufacturing facilities
* Issuance of approximately 10.4 million shares of common stock, raising
$299 million in gross proceeds
* Amendment of unsecured revolving credit facility, increasing the
facility from $250 million to $500 million, extending the maturity date
to June 27, 2009 and lowering the borrowing rate
* Entered into an agreement to acquire the 1.4 million square foot Sun
Microsystems, Inc. campus in Newark, California, which subsequently
closed on July 11, 2006
During the second quarter, the company acquired five properties, including:
* Charles Street -- a 47,912 square foot office and laboratory facility
in Cambridge, Massachusetts
* Shady Grove Road -- Human Genome Sciences, Inc.'s 635,058 square foot
headquarters office and laboratory facility in Rockville, Maryland
* Belward Campus Drive -- Human Genome Sciences' 289,912 square foot
large-scale manufacturing facility in Rockville, Maryland
* One Research Way -- a 49,421 square foot property in Princeton, New
Jersey
* 34175 Ardenwood Boulevard -- an 87.5% interest in a 72,500 square foot
facility in Fremont, California
As of June 30, 2006, the portfolio was 91.4% leased, with 344,000 square feet, or 68.2% of the unleased square footage, under redevelopment. The company also owns undeveloped land that management estimates can support up to 1,299,000 rentable square feet of laboratory and office space. |
