Opinions
Stephen Groff
Store Capital Corp.
STOR-N
COMMENT
Sep 06, 2017
Stock price when the opinion was issued
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They are a triple net lease company. They buy where there is little competition. They earn high cap rates. They require that the tenant is profitable. Their occupancy levels are very high. He was the first investor ever to visit them. He likes them as a dividend company and as a compound cash per share company. It normally falls below the radar. (Analysts’ Target: $30.81)
This business is fairly simple. They approach business owners and buy their real estate, leasing it back to them. The management team behind is excellent at what they do. This is the 3rd time they’ve done this. The first 2 were home runs for shareholders. They target the middle market, which is way less competitive. They offer value to the people they buy property from and manage it very tightly. Very focused on risk. The important part is that they earn cap rates that are significantly higher than their cost of capital, which enables them to grow at a very healthy rate. Dividend yield of 5.1%. (Analysts’ price target is $28.)
Specializes in buying property from a company and leasing it back to them. It could include a nursery, gym, or a chain of restaurants. They typically buy properties in small market locations, which enables them to earn much higher cap rates and spreads above their costs of financing, as opposed to what normal REITs do. A very effective model over time. It is able to create a lot of value. When you are able to buy shares at around $20 or slightly below, it is an incredibly good opportunity.