Sun Communities (SUI)

(A Top Pick Mar 31/25, Up 5%)

Stable, defensive. Actively buying back stock in mid-$125s. Great internal growth.

Can't think of a better defensive class than manufactured communities. Homeowner pays land rent to the REIT, yet still has to pay to maintain their home. Typically seen in retirement communities. Never a year of negative net operating income growth. Lots of upside from its discount to NAV. Yield is 2.89%.

(Analysts’ price target is $138.58)

(A Top Pick Sep 27/23, Up 17%)

The appeal is its very pure form of cashflow. Rarely trades at a discount to NAV, and today's one of them. Perplexing that it trades like an apartment REIT, but is way more defensive with better cashflow growth. Good setup for 2025.

(A Top Pick Jan 30/23, Down 11%)

Manufactured housing is defensive, last bastion of affordable housing. 55% of portfolio is in this area. Undersupply in US. Never had a year of negative net operating income growth. 15-20% discount to NAV today. Yield is 3%.

(A Top Pick Nov 29/22, Down 9%)

Great business model. Rarely trades at a discount to NAV, but that day is today. UK acquisition timing not great, leading to underperformance. 95% of the business is dependable, recession-resilient.

80% is US manufactured housing communities. Very recession-resilient sector, never a year of negative net operating income growth. High-quality cashflow attributes, so rarely trades at a discount as it is now. Yield is 3.06%.

(Analysts’ price target is $149.64)

(A Top Pick Apr 28/22, Down 23%)

Behaved like the market, but that's cold comfort. Remains one of his largest positions. Manufactured housing, the most stable class there is in real estate, with healthy rent growth of 6.5% this year. RV parks are experiencing robust growth, with 8% rent growth. Hit with 50% increase in insurance costs. Never had a year of negative net income growth. Recession resilient. Double-digit discount to NAV, usually trades at double-digit premium.

It owns land and rents it out to RV's and manufactured housing. Basically people buy a home, put it on the land and pay land grants. It is in one of the most defensive asset classes - affordable rents. Trades at a double digit discount to NAV with an attractive cash flow. It has never had a year of negative net income operating growth.   Buy 10  Hold 1  Sell 0

(Analysts’ price target is $162.88)

They operate in the RV park mostly and marina sectors (boats). These are extremely resistant to recessions. These are the last bastions of cheap housing. There's a supply-demand imbalance because they are not building more trailer parks, and not enough boats. There's 6-8% rent growth in 2023. SUI trades at over a 20% discount to NAV, which rarely happens. (Analysts’ price target is $161.30)

Defensive, in the US. Manufactured housing, RVs, and now into high-end yacht docking at marinas. Landlord has minimal capex. Value housing. Usually at a premium to NAV, except for right now. Yield is 1.92%. (Analysts’ price target is $216.30)

They operate RV and manufactured home parks -- a true land business without large capex requirements. Rents can increase substantially. Yield 1.97% (Analysts’ price target is $144.00)