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CEO Puts His Own Assets into American Assets

03/23/2018 5:00 am EST

Focus: REITS

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

American Assets Trust (AAT) is a real estate investment trust headquartered in San Diego. The trust formed in 2011 as a successor to American Assets Inc. — a privately held real estate business with decades of experience and knowledge of its core real estate markets, asserts Mark Skousen, editor of High-Income Alert.

The company has been in operation for more than 50 years and has significant investments in some of our nation’s most dynamic and high-barrier-to-entry real estate markets in Northern and Southern California, Oregon, Washington and even Hawaii.

It now boasts a real estate portfolio of 3.2 million rentable square feet of retail space and approximately 2.7 million square feet of office space.

Ernest Rady has been the company’s president, CEO and chairman since 2015. And, in addition to running the company, he has been making a huge personal bet on the company’s future success.

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In the last two weeks alone, he purchased 369,691 shares, an investment of more than $11.8 million. These are only his latest buys. He owns a total of more than 8.2 million shares.

This may seem surprising given that earnings declined 20% in the most recent quarter. But look forward, not back. Earnings are likely to hit $0.73 a share this fiscal year and then climb 33% in the year ahead.

In a conference call following the release of recent quarterly results, Rady said “Great real estate can be priced cheaper on Wall Street [than] on Main Street.”

He said he continues to be a regular buyer of the stock because he knows and understands the intrinsic value of the trust’s portfolio. He’s not the only one. There has been significant cluster buying here -- multiple buys from several insiders.

In addition to excellent trading potential with this trust, you’ll also collect a 3.36% yield that is virtually certain to rise in the weeks ahead. So, pick up American Assets Trust at market. And place a sell stop at $26 for protection.

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