BARGAIN-HUNTERS TARGET US REAL ESTATE STOCKS
As the S&P 500 approaches fresh highs, some investors hope to pick up bargains in the battered US real estate sector, where values of some major stocks have been cut in half this year, David Randall wrote for Reuters on August 8, 2020.
Coronavirus-fueled lockdowns and a major shift toward working from home have weighed on residential and retail US real estate investment trusts (REITs.) The sector has slid 7% this year compared with a 3% gain on the S&P 500.
Yet, investors say stocks in the sector could jump if a coronavirus vaccine loosens the pandemic’s hold on the US economy. “You’re going to find more attractive spots in the REIT space than you will in some areas of the market like technology, that have the growth but are getting expensive,” said Mark Freeman, chief investment officer at Socorro Asset Management.
Among his largest positions is Alexandria Real Estate Equities Inc., which rents space for medical research, and Prologis Inc., which owns warehouses used for ecommerce fulfillment by companies such as Amazon.com Inc. Drugmakers will likely have tens of millions of doses of coronavirus vaccines in the early part of next year, Anthony Fauci, the top U.S. infectious diseases official, told Reuters in an interview on Wednesday. Such a breakthrough would be a boon for companies like mall landlord Simon Property Group Inc., said John Creswell, executive managing director at Duff & Phelps Investment Management Co. Shares of the company are down 58.2% for the year to date and trade at a trailing price to earnings ratio of 9.6, less than half of their 52-week high of 22.9.