Summary
- EPRT was a red-hot REIT in late 2019.
- EPRT has superior fundamentals to EPR, yet both REITs have been hammered over the past few weeks.
- Perhaps Mr. Market is confused with the similar ticker symbols?
- We are initiating a Strong Buy based upon our projected 12-month forecast that shares could return in excess of 25%.
- This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »
As I rewind the clock, around five months, I’m reminded of an article that I wrote in December 2019 titled Essential Properties Realty Trust: My Best REIT Pick Of 2019. In that piece I explained “shares (in EPRT) have returned more than 85%” in 2019 and outperformed every other REIT in my portfolio.
We had planned to hold onto Essential Properties (EPRT) (last year) but I warned readers that shares were “priced for perfection.” Subsequently, we took our chips off the table, recognizing that there were better opportunities for deploying capital in 2020. Fast forward to April 27, 2020…
Source: Yahoo Finance
To be clear, our skills are limited to fundamental analysis, and while I wish I could have predicted the black swan events we’re witnessing today, my only compass was my keen sense of valuation. EPRT was a red hot REIT in late 2019 (my #1 pick actually) and I’m happy that I decided to let my conscience be my guide.
I also want to point out that we also avoided the temptation earlier this year (and last year) to purchase shares in EPR Properties (EPR). Even before COVID-19 reared its ugly head, we weren’t tempted to become high-yield landlords. Again, it was our keen sense of fundamental analysis that allowed us to steer away from high- risk REITs recognizing that they would likely generate outsized losses.
