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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend -- Ignore unavailable to you. Want to Upgrade?

To: zebraspot who wrote (2139)	7/8/2001 11:56:13 AM
From: Richard Barron	Respond to of 2561

zebraspot, I would almost think that the REITs will continue to run. I believe Barry Vinocur put out a downgrade on REITs about 1-1/2 years ago; right before a 15-20% run. I don't know where the numbers are coming from, since FFO earnings are growing still, yet his numbers show every sector dropping earnings except outlets and offices. I think these are downward revisions to earnings, not actual earnings growth. If so, this is a stupid worthless number that analyst use to justify unreasonable valuations on high tech companies and then lead to 50% haircuts when earnings are missed. REIT investors don't invest this way. They look for 3-5 or 8-10% long term growth rates compounded with the dividends and dividend growth. The difference in multiples of these 2 groups generally trade 15-20% cheaper. I think there is only 3-8% more run in most REITs before they are fully priced. On the other hand, I think the average stock is 30-40% overpriced, so REITs have a compelling value compared to the general equities, If others perceive this, then they will push REITs up another 10% while equities give up 10% or more. I can't call a top, but I am waiting for some trading ranges to develop. Bob, APROZ is the only buy and hold position that I have taken at current prices. It is a microcap, so it isn't likely to run until it gets 'discovered' like NHR. I think the dividend is very safe. KTR is probably pretty safe since they just raised the dividend. Many of the health cares are worth looking at if you want high yields. I would try to find one that is paying out less than 80% of FFO with some growth.