A return to growth
A few of the stocks in 2CHYP have been in a transitionary period where the companies are focused on improving quality rather than growing the bottom line. These periods are often rough in terms of market pricing as the improvements that are going on behind the scenes are not immediately visible. However, as these transition periods end FFO/share growth will pickup and that will often help the market take notice.
Uniti’s long period of purgatory will likely end in September as that is the extended and final deadline for WIN to assume or reject the lease. If that goes well, UNIT will be able to go into growth mode which was its default state until this Aurelius led fiasco took place. It is inherently a tech REIT with huge growth potential.
UMH is finally spending the cash that had been building on its balance sheet. In addition to a recently announced acquisition, they have 3 more planned in 2019. Once these properties are stabilized it should greatly improve bottom line growth.
I am of the belief that 2019 is the trough year for retail REITs and that growth will return in 2020. As we get closer, these companies will have more clarity into 2020 leasing and the optimism could be apparent as early as the 2nd quarter conference calls.
We are finalizing our 2nd Quarter portfolio analytics which will be uploaded to the website early next week. Please give it a read to get updates on overall portfolio positioning and why we hold each stock in the portfolio.