Third Avenue Management, an investment management company based in New York City, released its “Third Avenue Real Estate Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the calendar year’s first half, the fund returned -1.66% (after fees) versus -3.17% (before fees) for the Fund’s most relevant benchmark, the FTSE EPRA NAREIT Developed Index. The Fund reported an annualized return of +8.40% (after fees) since its inception more than twenty-five years ago. For more information on the fund’s top picks in 2024, please check its top five holdings.
Third Avenue Real Estate Value Fund highlighted stocks like Prologis, Inc. (NYSE:PLD), in the second quarter 2024 investor letter. Prologis, Inc. (NYSE:PLD) is a global leader in logistics real estate. The one-month return of Prologis, Inc. (NYSE:PLD) was -0.22%, and its shares lost 1.65% of their value over the last 52 weeks. On August 7, 2024, Prologis, Inc. (NYSE:PLD) stock closed at $120.15 per share with a market capitalization of $111.248 billion.
Third Avenue Real Estate Value Fund stated the following regarding Prologis, Inc. (NYSE:PLD) in its Q2 2024 investor letter:
“The Fund also added to its investment in the common stock of Prologis, Inc. (NYSE:PLD) during the quarter. Held in the portfolio in its current iteration since 2020, the company is the largest owner of modern industrial and logistic facilities globally with approximately 1.2 billion square feet of space (on a pro-rata basis) that is 97.0% leased and generating nearly $6.0 billion of recurring cash flow each year—placing the value of its stabilized portfolio at more than $100 billion, by Fund Management’s estimates.
With such a valuable platform, Prologis is now the largest listed Real Estate Investment Trust (“REIT”) by equity market capitalization—and one that is well followed with nearly thirty “sell-side” analysts covering the company and multiples more on the “buy-side”. To some, such wide coverage may suggest a lack of opportunity with more “efficient” pricing. However, Fund Management would argue that most of these market participants are only focused on the near-term outlook and would submit the company’s most recent earnings results as “Exhibit A” in that regard (i.e., Prologis reduced its guidance by 3% for the year but the stock price declined by nearly 20% in the ensuing days)…”(Please click here to read the full text)
A large logistic facility within the industrial real estate sector.
Prologis, Inc. (NYSE:PLD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Prologis, Inc. (NYSE:PLD) at the end of the first quarter which was 46 in the previous quarter. While we acknowledge the potential of Prologis, Inc. (NYSE:PLD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Prologis, Inc. (NYSE:PLD) and shared the list of best self-storage and apartment stocks to buy. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
