Excel Trust to Repurchase Shares - Analyst Blog
August 16 2011 - 2:15PM
Zacks
Excel Trust, Inc. (EXL), a real estate
investment trust (REIT) primarily focusing on retail assets, has
recently executed a stock repurchase program to facilitate a
selective purchase of its common stock over a given time
period.
The strategic move is aimed at capitalizing on the current
market fundamentals by mopping out some of the common stock of the
company at a relatively low price, as the shares are presently
undervalued due to uncertain market sentiments.
In concurrence with the share repurchase program, Excel Trust
would be entitled to acquire up to $30 million worth of its common
stock in the open market and negotiated purchases. At present, the
company has approximately 31 million of common stock
outstanding.
Excel Trust has historically purchased properties
opportunistically at significantly low prices and sold them at a
comparatively higher price at a later stage to profit from the
price differential during this holding period. Given the present
dislocations in the market, management felt that buying common
shares at a low price would be one of the best investment
alternatives for the company.
Since its inception, Excel Trust has grown its portfolio through
strategic acquisitions to a gross asset value of approximately $500
million. The company targets high-quality regional community
centers and neighborhood grocery-anchored centers, primarily
anchored by leading retailers of the country. Excel Trust usually
enters into long-term leases with its tenants, which insulate it
from short-term market volatility.
Unlike larger retail REITs that focus on densely populated trade
areas, Excel Trust has followed a mid-market model, scurrying to
own some very attractive mid-tier shopping centers in both primary
and secondary markets. The company has acquired properties in
diverse markets such as Scottsdale, Arizona, Northern California
and Washington, D.C.
We currently have an Underperform recommendation and a Zacks #4
Rank for Excel Trust, which translates into a short-term Sell
recommendation and indicates that the stock is expected to perform
well below the overall U.S. equity market for the next 1–3 months.
However, we have a Neutral recommendation and a Zacks #3 Rank
(short-term Hold) for Developers Diversified Realty
Corp. (DDR), one of the peers of Excel Trust.
DEV DIVERFD RLT (DDR): Free Stock Analysis Report
EXCEL TRUST INC (EXL): Free Stock Analysis Report
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