Opinions
Jeff Young
Tricon Capital Group
TCN-T
BUY
Dec 13, 2013
Stock price when the opinion was issued
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The market has punished it too much. It is in the residential rental sector in the U.S., especially in the sun belt. The rentals are affordable and appeal especially to the 35 to 44 year old demographic who want to rent good homes rather than buy. The share price is at a 40% discount to the total value of all its homes. Good opportunities should emerge.
A play on US housing. It has 3 components. 1.) An asset manager for institutions that want to invest in that. 2.) Land development business. 3.) Single-family rental portfolio that it’s built out with over 2000 homes. If you break down these 3 components and compare it against companies in those spaces, the valuation looks reasonable. Thinks the story will follow out along the US recovery, which he thinks has a few more years in it.