Friday, August 23, 2013

Silver Bay Is Finally A Bargain


After a lot of hype about the single-family rental market, the Silver Bay Realty Trust (SBY) IPO turned into a major bust. The REIT went public back in December at $18.50 and quickly shot up to over $22, but any investors buying that hype have felt nothing but pain in 2013. In fact, the stock now trades below NAV near all-time lows around $15.50. Could it finally be time to buy the REIT?

Silver Bay focuses on acquiring, leasing, and maintaining a portfolio of single-family homes in select attractive markets in the U.S. It plans to operate under a REIT where substantially all of future income is returned to shareholders.

For investors that follow Stone Fox Capital, a big warning was issued when the REIT started trading due to the expected weak financials and lack of an initial dividend. In the early days, investors were confusing bargain housing prices with operating profits


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