12 Best Warehouse and Self Storage Stocks to Buy

Published on October 24, 2021 at 3:42 am by Hamna Asim in Hedge Funds, News

In this article, we will take a look at the 12 best warehouse and self-storage stocks to buy. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Warehouse and Self Storage Stocks to Buy.

Real estate investment trusts, or REITs, are preferred by investors who want to partake in the growing real estate industry, without the burdens of actually owning property. According to Vic Patel, the founder of Forex Training Group, the current market for warehouse and self storage REITs is booming, and it is wise for investors to be bullish on these stocks. He explains his stance by stating that the COVID-19 pandemic caused a lot of unemployment, and people could not afford to make rental payments. Some people even sold their houses, which means demand for storage and warehouse REITs increased during the last year.

According to a snapshot of the US storage sector, 10.6% of households are currently renting a self storage unit, up from 9.4% in 2020. The annual industry revenue for self storage industry stands at $39.5 billion as of January 2021.

The self storage market was valued at $48.02 billion in 2020, and the value is expected to reach $64.71 billion by 2026, suggesting a CAGR of 5.45% during the forecast period. Increased urbanization is one of the major causes of storage industry growth, since new businesses need warehouses, and people shifting from rural to urban areas, or intercity migration for work also results in renting self storage units for personal belongings.

Some of the most noteworthy warehouse and self storage stocks include CubeSmart (NYSE:CUBE), Extra Space Storage Inc. (NYSE:EXR), Public Storage (NYSE:PSA), and WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), among others discussed at length below.

12 Best Warehouse and Self Storage Stocks to Buy

Photo by JOSHUA COLEMAN on Unsplash

Our Methodology

Let’s dive into the 12 best warehouse and self storage stocks to buy. We took into account hedge fund sentiment, analysts’ ratings, long-term growth potential, and fundamentals while choosing these stocks. The stocks are ranked based on their popularity amongst the hedge funds tracked by Insider Monkey, which was determined by the number of hedge funds that choose to invest in them.

Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Best Warehouse and Self Storage Stocks to Buy

12. Duke Realty Corporation (NYSE:DRE)

Number of Hedge Fund Holders: 15

Duke Realty Corporation (NYSE:DRE) is a leading brand in the real estate industry, owning, developing, and managing a series of industrial and logistics properties. They own bulk warehouses and state-of-the-art distribution centers. Duke Realty Corporation (NYSE:DRE) has been in business since 1972, and over the years, the company has amassed properties in 19 logistics markets across the US, with imminent plans of expansion. Duke Realty Corporation (NYSE:DRE) also leverages e-commerce to successfully interact with potential clients and lease spaces via an online process.

Of the 873 hedge funds monitored by Insider Monkey, 15 were long Duke Realty Corporation (NYSE:DRE) at the end of June, with stakes worth $49.1 million. This is compared to 20 in the previous quarter, with hedge funds owning $279.6 million worth of stakes in the warehouse REIT.

On September 1, Barclays analyst Anthony Powell initiated coverage of Duke Realty Corporation (NYSE:DRE) with an Overweight rating, setting the price target at $57.

Billionaire American investor Israel Englander’s Millennium Management is the biggest stakeholder in Duke Realty Corporation (NYSE:DRE), owning 259,718 shares that are valued at $12.29 million.

Duke Realty Corporation (NYSE:DRE) is an excellent warehouse and self-storage stock to purchase, much like CubeSmart (NYSE:CUBE), Extra Space Storage Inc. (NYSE:EXR), Public Storage (NYSE:PSA), and WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC).

11. STAG Industrial, Inc. (NYSE:STAG)

Number of Hedge Fund Holders: 15

The eleventh stock on our list of the best warehouse and self storage stocks to buy is STAG Industrial, Inc. (NYSE:STAG), which is a REIT focused on acquiring and operating single-tenant industrial properties across the United States. By focusing solely on industrial properties, STAG Industrial, Inc. (NYSE:STAG) has made it easier for investors to find a stable balance of growth and income.

At the end of the second quarter of 2021, 15 hedge funds tracked by Insider Monkey held stakes in STAG Industrial, Inc. (NYSE:STAG), worth $232.1 million, down from 17 in the previous quarter. The largest stakeholder in STAG Industrial, Inc. (NYSE:STAG) is Zimmer Partners, holding 1.68 million shares valued at $63.07 million.

STAG Industrial, Inc. (NYSE:STAG) announced second quarter earnings on July 27. The EPS for the company was $0.52, beating estimates by $0.02. Similarly, the actual revenue of $138.43 million also surpassed analysts’ estimations by $4.07 million.

On August 3, Michael Carroll, an analyst with RBC Capital, kept an Outperform rating on STAG Industrial, Inc. (NYSE:STAG)’s shares, with a price target of $46.

10. StorageVault Canada Inc. (NASDAQ:SVAUF)

Number of Hedge Fund Holders: N/A

StorageVault Canada Inc. (NASDAQ:SVAUF) owns, manages, and rents out self storage and portable storage space to both residential clients and commercial customers. In addition to the storage facilities, StorageVault Canada Inc. (NASDAQ:SVAUF) also offers document storage services, data management, and shredding services to multiple healthcare institutions and multiple government establishments. It is the only publicly listed self storage REIT in Canada, with more than 200 locations around the country. StorageVault Canada Inc. (NASDAQ:SVAUF) is the tenth stock on our list of of the best warehouse and self storage stocks to buy.

Scotiabank analyst Himanshu Gupta raised the price target from C$6.25 to C$6.5 on October 15, while keeping an Outperform rating on StorageVault Canada Inc. (NASDAQ:SVAUF)’s stock.

The company announced on October 15 that it had purchased two new storage locations from separate vendors, one in GTA and the other in Alberta, for a total of $8.7 million. The properties were paid for partly in cash, and 713,537 common shares worth $3.6 million were issued in StorageVault Canada Inc. (NASDAQ:SVAUF) as part of the payment. The transactions closed by StorageVault Canada Inc. (NASDAQ:SVAUF) this year are valued at $140.7 million with the completion of these two purchases.

StorageVault Canada Inc. (NASDAQ:SVAUF) is an excellent warehouse and self storage stock to purchase, much like CubeSmart (NYSE:CUBE), Extra Space Storage Inc. (NYSE:EXR), Public Storage (NYSE:PSA), and WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC).

9. PS Business Parks, Inc. (NYSE:PSB)

Number of Hedge Fund Holders: 16

PS Business Parks, Inc. (NYSE:PSB) is yet another American REIT that owns, develops, and manages several commercial properties, focusing mainly on multi-tenant industrial and office space. The company owns 28 million square feet of rental space, divided into 97 properties in California, Texas, Virginia, Florida, Maryland, and Washington State.

At the end of June, 16 hedge funds tracked by Insider Monkey owned stakes valued at $111.1 million, up from 12 in the previous quarter, with stakes worth $112.4 million. The largest stakeholder of PS Business Parks, Inc. (NYSE:PSB) is Osterweis Capital Management, with stakes amounting to $33.1 million.

Wells Fargo analyst Blaine Heck upgraded the shares from Underweight to Equal Weight, with a price target of $163. The analyst said that PS Business Parks, Inc. (NYSE:PSB) has recovered from the impact of the COVID-19 pandemic, and the company valuation is now in line with its competitors.

Heartland Mid Cap Value Fund by Heartland Advisors mentioned PS Business Parks, Inc. (NYSE:PSB) in their Q1 2021 investor letter. Here is what they said:

“Filling a niche. The Real Estate sector continued to add to the strong run it has enjoyed since the COVID-19 lows of early 2020. At that time, we took a stake in PS Business Parks, Inc. (PSB) based on our view that the market was being overly pessimistic about the long-term prospects for the real estate investment trust (REIT). Our actions were validated as the business has been a solid performer in the portfolio.

PS Business Parks operates in the industrial, warehouse, and “flex” (combination of industrial & office) real estate segment. Unlike competitors who often lease tens of thousands of square feet to single tenants, many of PS Business’ clients rent less than 5,000 square feet at a given location. The business also offers shorter leases— usually one to three years—than many of its peers…” (Click here to see the full text)

8. CubeSmart (NYSE:CUBE)

Number of Hedge Fund Holders: 18

The next stock on our list of of the best warehouse and self storage stocks to buy is CubeSmart (NYSE:CUBE), which is a Pennsylvania-based REIT focused on self storage facilities solely. They target both, residential and commercial segments for their storage facilities. When the company was founded in 2004, it was named U-Store-It-Trust, but in 2011, it was rebranded as CubeSmart (NYSE:CUBE). The company has over 1000 indoor storage facilities nationwide, making it the eighth stock on our list.

Out of the 873 hedge funds monitored by Insider Monkey, 18 were bullish on CubeSmart (NYSE:CUBE) by the end of the June quarter, down from 25 in the first quarter. Ric Dillon of Diamond Hill Capital is the leading stakeholder in CubeSmart (NYSE:CUBE).

The company is actively making use of the rising e-commerce trend as a result of the COVID-19 pandemic and economic digitalization. On October 1, SmartView, a mobile app by CubeSmart (NYSE:CUBE), was launched so that customers could monitor current company performance. The customers can also track their personal data remotely using SmartView, an initiative by CubeSmart (NYSE:CUBE) that is meant to drive the self storage industry forward.

7. National Storage Affiliates Trust (NYSE:NSA)

Number of Hedge Fund Holders: 20

The seventh stock on our list of the best warehouse and self storage stocks to buy is National Storage Affiliates Trust (NYSE:NSA), which is a self-managed REIT that owns and operates self storage facilities in high growth markets. The company has 55.2 million square feet of rental storage space, with 864 self storage facilities across 36 states in the US, as well as Puerto Rico. Since National Storage Affiliates Trust (NYSE:NSA)’s initial public offering in 2015, the REIT has exponentially grown by strategic pipeline acquisitions, third party acquisitions, and strategic joint ventures.

Of the exclusive hedge funds tracked by Insider Monkey, 20 held stakes amounting to $208 million in National Storage Affiliates Trust (NYSE:NSA) at the end of June, up from 14 in the previous quarter with stakes valued at $103.4 million. Israel Englander’s Millennium Management is the largest stakeholder in the company, with 1.82 million shares worth $92.25 million.

On October 7, Berenberg analyst Keegan Carl kept a Buy rating on National Storage Affiliates Trust (NYSE:NSA), setting a price target of $62. He stated that the market seems to be underestimating the capacity for potential growth in the REIT industry.

The company announced a common share dividend of $0.41 on August 26, payable to shareholders on September 30. This dividend reflects a 7.9% increase as compared to the previous quarter, and a 20.6% jump from Q3 2020.

National Storage Affiliates Trust (NYSE:NSA) is an excellent warehouse and self storage stock to purchase, much like CubeSmart (NYSE:CUBE), Extra Space Storage Inc. (NYSE:EXR), Public Storage (NYSE:PSA), and WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC).

6. Extra Space Storage Inc. (NYSE:EXR)

Number of Hedge Fund Holders: 21

The sixth stock on our list of the best warehouse and self storage stocks to buy is Extra Space Storage Inc. (NYSE:EXR), which is a REIT based out of Utah, dealing in self storage facilities. Founded in 1977, Extra Space Storage Inc. (NYSE:EXR) is the second largest operator of self storage rental spaces in the United States.

At the end of June, 21 hedge funds in Insider Monkey’s database were bullish on Extra Space Storage Inc. (NYSE:EXR), down from 28 in the previous quarter. Jeffrey Furber of AEW Capital Management owns stakes worth $129.5 million in Extra Space Storage Inc. (NYSE:EXR), making him the largest stakeholder of the company.

On July 27, the actual FFO for the company was $1.64, beating consensus estimates by $0.10. The actual revenue for Extra Space Storage Inc. (NYSE:EXR) was $321.5 million, surpassing estimated revenue by $4.18 million.

Keegan Carl, a Berenberg analyst, kept a Buy rating on the stock with a $198 price target, owing to the company’s potential for future sustainable growth.

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