Monday, June 23, 2014

Silver Bay Realty Trust Is Cheap, But Is It Any Better Than Competitor American Homes 4 Rent?


The latest results from Silver Bay Realty Trust (NYSE: SBY  ) continue to highlight a concerning problem with the structure of the company. It is the prime reason that investors aren't interested in the company's stock despite it trading considerably below the net asset value that grows on a quarterly basis.

Silver Bay Realty was created to exploit an opportunity to invest in attractive housing prices and the expanding single-family rental market.

Prior to the financial crisis, mom-and-pop investors with a few rental homes dominated the sector. Silver Bay, along with other recently established companies like American Residential (NYSE: ARPI  ) and American Homes 4 Rent (NYSE: AMH  ) , rushed into the market. While a lot of the rental properties were purchased during the ongoing housing crisis at values below replacement costs, the firms still have the important task of proving that the individual investments can scale to generate profits for investors.

Read the full article here.


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