We recently compiled a list of the 8 Most Undervalued REIT Stocks To Buy Now. In this article, we are going to take a look at where Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) stands against the other undervalued REIT stocks.
Historically, REITs are a major beneficiary of rate cuts. They tend to outperform markets if cuts are followed by a recession while they perform in line with the S&P in the case of no recession. Laurel Durkay, Morgan Stanley Investment Management head of global listed real assets, previously mentioned to CNBC that the REITs that are going to benefit the most from a rate cut would be net lease companies that would experience an improved acquisition spread and a better cash flow growth as a direct result of the rate cut.
Furthermore, REITs are more resilient as they continue to capitalize on the trends that persist regardless of the volatility in conventional real estate. For instance, data center REITs benefit from AI trends, health care REITs benefit from an aging demographic, and housing REITs benefit from the housing affordability issues persistent in the United States.
In recent news, Fed Chair Jerome Powell pointed towards further, smaller rate cuts saying that the Fed is not on any preset course. Two more rate cuts are to be witnessed this year in case the economy performs as expected. However, these cuts will be smaller and not as aggressive as the first half percentage point rate cut. The rate cut is taking center stage at the REIT conference in NYC, as reported by CNBC.
This rate cut is positive news for the REIT sector as seconded by Conor Flynn, CEO of Kimco Realty. In his opinion, the potential rate cut would change investor appetite in real estate investment trusts. He believes in a bright outlook for the sector and that the cut would benefit real estate in general as well as his business.
Our Methodology:
In order to compile our list, we first used stock screeners to identify REIT stocks that are trading with a forward P/E under 20, as of October 7. We listed stocks from all sub-segments of the REIT industry. From those, we picked the stocks which have the highest number of hedge fund holders. The 8 most undervalued REIT stocks to buy now have been ranked in ascending order of the number of hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)
Number of Hedge Fund Holders: 25
Forward P/E: 16.71
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) was founded in 2013 as the first gaming real estate investment trust in the US. The firm’s portfolio includes 65 premier gaming and related facilities which are operated by recognized industry leaders. The REIT engages in acquiring, financing, and owning real property to be leased to gaming operators in triple net lease arrangements.
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) has an unmatched gaming industry and real estate expertise. The REIT has a portfolio positioned well across the country and focuses on stable and resilient regional gaming markets. It benefits from its unmatched roster of the gaming industry’s leading operators. Regarding the future of the REIT, the firm remains confident in the long-term health of the casino gaming industry.
For the quarter ended June 30, total revenue increased 6.7% year-over-year to $380.6 million. AFFO grew 5.6% as compared to the prior year period. The firm continues to expand its portfolio and build its tenant base while strengthening its bond with existing tenants. It agreed to fund and oversee a landside development project and hotel renovation of the Belle of Baton Rouge for its tenant The Queen Casino and Entertainment Inc. The REIT also plans to add two promising assets to its existing portfolio through the acquisition of Bally’s Kansas City and Bally’s Shreveport.
Therefore, Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) is a real estate investment trust focused on growth and diversification. The firm is positioned well as the real estate partner of choice for operators of all sizes.
Overall GLPI ranks 6th on our list of the most undervalued REIT stocks to buy. While we acknowledge the potential of GLPI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than GLPI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.