PSA

Public Storage

Finance/Real Estate, Consumer


Presented:02/18/2016
Price:$251.97
Cap:$43.78B
Current Price:$344.99
Cap:$60.38B

Presented

Date02/18/2016
Price$251.97
Market Cap$43.78B
Ent Value$47.34B
P/E Ratio41.51x
Book Value$29.58
Div Yield0%
Shares O/S173.76M
Ave Daily Vol883,346
Short Int2.09%

Current

Price$344.99
Market Cap$60.38B
Public Storage, provides storage units for personal, business and vehicles need. It operates through the following business activities: Domestic Self-Storage, European Self-Storage, and Commercial. The Domestic Self-Storage activities acquires, develops, owns, and operates self-storage facilities which offers storage space for personal and business use. The European Self-Storage activities operates through its subsidiary, Shurgard Europe, which owns self-storage facilities in the Western Europe. The Commercial activities owns and operates rentable commercial spaces. The company was founded by Bradley Wayne Hughes, Sr. and Kenneth Q. Volk, Jr. in 1972 and is headquartered in Glendale, CA.

Publicly traded companies mentioned herein: AMERCO (UHAL), Extra Space Storage (EXR), Public Storage (PSA), Sovran Self Storage (SSS), CubeSmart (CUBE), National Storage Affiliates (NSA)

Highlights

The presenter is short shares of Public Storage (PSA), and believes the position to be somewhat contrarian given recent trends and the stock’s performance (+25% over the past year). There are four main self storage REITs in the industry and PSA is by far the largest with a ~$43 billion market cap and $47 billion EV. At current levels (~$250 and a ~4.5% cap rate) shares sit at a substantial premium to NAV and over 20x FFO. He believes PSA may simply be “too big, and unable to take any action that can move the needle meaningfully.” In addition, he characterized demand for storage as a “black box,” and said it may be peaking (occupancy is hovering in the mid-90%s) at a time when competition is increasing. Overall, there is the potential for the stock to decline 20% - 30% to a level more in line with its NAV.

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Idea Discussion

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