In this post, we will look at the 5 best warehouse and self-storage stocks to buy. If you want to find out about more stocks and the industry, head on over to 11 Best Warehouse and Self-Storage Stocks to Buy.
5. Extra Space Storage Inc. (NYSE:EXR)
Number of Hedge Fund Holders: 27
Extra Space Storage Inc. (NYSE:EXR) is the second largest owner of self-storage spaces and the largest self-storage manager in the United States. It has more than 2,000 stores and more than a million units all over CONUS and in Puerto Rico. The firm is a member of the S&P 500 index and is headquartered in Salt Lake City, Utah.
A remarkable factor about Extra Space Storage Inc. (NYSE:EXR) is the fact that it has grown its Funds From Operations (FFO) by an eye popping 600% since 2011 – the highest in the industry. Its first quarter of 2022 results demonstrated a 35% FFO growth and a 95% occupancy rate, indicating that the firm continues to generate strong cash from all of its properties. At the same time, it grew its rent by 24%, with only meager discounts – indicating a strong pricing power. The firm has returned 20.9% annually through dividends since 2004, and it pays a $1.5 dividend for a 2.8% yield.
Truist raised Extra Space Storage Inc. (NYSE:EXR)’s share price target to $225 from $200 in August 2022, highlighting that recent Q2 earnings were impressive. Insider Monkey studied 895 hedge fund portfolios for this year’s second quarter to discover that 27 had invested in the firm.
Extra Space Storage Inc. (NYSE:EXR)’s largest investor is Stuart J. Zimmer’s Zimmer Partners which owns 987,500 shares that are worth $167 million.
4. National Storage Affiliates Trust (NYSE:NSA)
Number of Hedge Fund Holders: 28
National Storage Affiliates Trust (NYSE:NSA) is an REIT that focuses its attention on acquiring and developing self-storage properties in the top 100 metropolitan areas in the United States. The firm has properties in 35 states and in Puerto Rico.
National Storage Affiliates Trust (NYSE:NSA) has a strong business model that allows it to partner with local firms in different cities which then allows it to leverage their expertise to deliver unique competitive advantages. This has allowed the company to have an average same store revenue growth of 6.6%, same store NOI of 8.5%, and average core FFO per share growth of 16.4% over the past five years – beating all of its major peers in the industry. The firm also pays a 55 cent dividend for a 3.8% yield.
Insider Monkey profiled 895 hedge funds for this year’s June quarter and found out that 28 had bought National Storage Affiliates Trust (NYSE:NSA)’s shares.
Out of these, National Storage Affiliates Trust (NYSE:NSA)’s largest investor is Israel Englander’s Millennium Management which owns 1.2 million shares that are worth $60 million.
3. Public Storage (NYSE:PSA)
Number of Hedge Fund Holders: 33
Public Storage (NYSE:PSA) is a self-storage REIT headquartered in Glendale, California, United States. The firm has tens of millions of square feet of rentable property across the United States and other countries.
Public Storage (NYSE:PSA) is one of the strongest players in its industry, as it has invested $7.4 billion in acquisitions since 2019. These have yielded 3.5% and 5.2% in 2020 and 2021, respectively. The firm also has an industry leading same store NOI margin of 78.8%, and its 21x share price to FFO ratio indicates strong market confidence. Public Storage (NYSE:PSA) pays a $2 dividend for a 2.2% yield.
Raymond James increased Public Storage (NYSE:PSA)’s share price target to $380 from $365 in August 2022, highlighting that the firm’s strong balance sheet makes it a great inflation play. 33 of the 895 hedge fund portfolios studied by Insider Monkey for this year’s second quarter had invested in the company.
Public Storage (NYSE:PSA)’s largest investor is Cliff Asness’s AQR Capital Management which owns 632,696 shares that are worth $196 million.
LRT Capital Management mentioned the company in its Q2 2022 investor letter. Here is what the firm said:
“Public Storage is the largest self-storage REITs. The company acquires and develops self-storage facilities and currently owns or manages over 2,7000 properties and is extremely well diversified across the United States. The company was founded in 1972 and IPO-ed in 1980. We have long admired the company’s ability to grow and maintain high occupancy. We purchased our position after a recent pullback in the company’s share price. We also hold a small position in Extra Space Storage Inc., for the same reasons.
The business is largely recession proof with predictable revenues that grow every year due to rent increases, operating efficiencies and new sites. Typical reasons for using a self-storage facility include deaths, divorces, downsizing as well as birth and marriages – things that happen all the time, regardless of the economy. The company can continue to grow through consolidation as the self-storage market is still dominated by mom-n-pop operators. By acquiring underperforming assets and improving operations the company creates incremental shareholder value.
2. Prologis, Inc. (NYSE:PLD)
Number of Hedge Fund Holders: 49
Prologis, Inc. (NYSE:PLD) is a logistics REIT headquartered in San Francisco, California, United States. The firm has access to close to a billion square feet of property in 19 countries.
Not only is Prologis, Inc. (NYSE:PLD) the largest industrial real estate company in the world, but its consensus net asset value (NAV) of $145 per share suggests that it is undervalued. It counts Amazon, Home Depot, and FedEx as its tenants, with Amazon making up 5.7% of its annualized net lease value. Additionally, in a unique point, Prologis, Inc. (NYSE:PLD) is also the third largest private solar provider in America, through its efforts to install solar panels on its warehouses. The firm has a 10% 5-year FFO CAGR and 11% 5-year dividend CAGR, higher than the industry average. It pays a 79 cent dividend for a 2.3% yield.
49 of the 894 hedge funds surveyed by Insider Monkey for their June quarter of 2022 holdings had held a stake in Prologis, Inc. (NYSE:PLD).
Prologis, Inc. (NYSE:PLD)’s largest investor is Jeffrey Furber’s AEW Capital Management which owns 2.5 million shares that are worth $294 million.
1. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Number of Hedge Fund Holders: 61
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is an American work space and portable storage solutions provider that is headquartered in Pheonix, Arizona. The company leases its storage spaces to a variety of segments such as industrials, education, and government users.
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) has a staggering $1 billion operating income target for the next five years, with a 12x EV/EBITDA target. This induces a potential upside over the current share price of $42.57. The firm is also working towards developing ancillary services such as lighting and shelves (VAPS), with this segment expected to contribute at least $220 million to its revenues in the medium term and as much as $373 million.
Deutsche Bank raised WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s share price target to $50 from $49 in August 2022, sharing that the firm had a strong Q2 with impressive EBITDA growth. Insider Monkey’s Q2 2022 hedge fund study of 895 funds revealed that 61 had bought the company’s shares.
Disclosure: None. You can also take a look at 10 Stocks You Should Sell in 2022 According to Billionaire Dan Loeb and These 10 Stocks are Gaining After Announcing Share Buybacks.
