AHT looks intersting. I got into HPT just a short while ago. Do you think the discount is because investors feel the highend nature of their hotels might cause them to become victim of a bad economy? However they didn't seem to be hurt by the 2008 recession and came out of it even stronger.
The management of AHT performed well during the 2008-9 meltdown, although the stock still collapsed, due to indiscriminate selling. I was lucky enough to buy some at $0.99/share at the bottom of the abyss and continued to buy more as the REIT rebounded. I think that the big discount on AHT is due to recession fears and the high debt load (which they manage well). There is a very positive article on Starwood (HOT) in this week's Barron's. Many of the positive points also apply to AHT, with the largest exception concerning the fast growth in Chinese domestic tourism. AHT has no foreign exposure, while HOT is expanding in China. However, by any measure AHT is much cheaper than HOT. I own AWP for foreign RE exposure and have been attracted by the large discount to NAV.
The Barron's article takes at stab at valuing HOT, based on sales this year of 17 full service hotels (sold by various sellers) at an average cost per room of $425K. AHT bought the Highland 28 hotel portfolio for $158K "per key", which is their parlance for "per room". Now, I admit that the Highland hotels are not worth $425K/room, but a reasonable value would be in the $250-$300K/room range, so as far as I can guesstimate they got a great deal. Add to this that REVPAR (revenue per available room) continue to rise. Also, nobody in their right mind is building hotels (or building much of anything for that matter) in the USA. That bodes well for future supply/demand balance.
When eventually the market looks favorably on hotels, AHT will rebound strongly. I can afford to wait patiently while collecting the dividend.
i'll take a look at that. thanks for the info. i like moderate yield with some upside. and it seems like the bottom is in or will be in real soon on hotels.
in a different thread here, one person mentioned IYR and i kind of like that as it has options. since i don't have a job/salary, i try to stick most of my money in things that can't possibly go to zero (like an index).
something like AHT, single stock, would fit for 1 or 2% of my portfolio. i do need some of these (single stocks) as they've got the most upside (hopefully the downside is over).