Industrial Logistics: A Logical Choice Among REITs

12/10/2019 5:00 am EST

Focus: REITS

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

With annual revenues of $163 million, Industrial Logistics Properties (ILPT), based in Newton, Mass., owns and leases industrial and logistics properties; the REIT has just broken out from a basing pattern, notes technical analyst Leo Fasciocco, editor of Ticker Tape Digest.

Industrial Logistics Properties owns 267 properties with a total of approximately 28.8 million square feet They include 226 buildings, leasable land parcels and easements totaling approximately 16.8 million square feet. They are on the island of Oahu, Hawaii and there are also 40 properties in 24 other states.   

The stock's 12-month performance chart shows the stock up 4% versus an 11% gain for the stock market.  The long-term chart shows the stock coming public back in January of 2018 at $23.70. The stock pulled back to around $20 but then rallied to its all-time high of $24.70 by August.

The stock slipped back again to as low as $18 by June. However, it has now come on again.  The daily chart shows the stock gapping higher and breaking out from its four month flat base. The stock's momentum indicator is strongly bullish.

This year, analysts are forecasting a 9% increase in net to $1.75 a share from the $1.61 the prior year.  The stock sells with a price-earnings ratio of 13. Looking out to 2020, the Street is calling for a more modest 4% rise in net to $1.83 a share from the anticipated $1.75 this year.

Quarterly earnings will be strong. Net for the fourth quarter should rise 13% to 45 cents a share from the 40 cents the prior year. Then in the first quarter of 2020, the Street is calling for a 12% gain again this time to 46 cents a share from the 41 cents the prior year.

Technically the stock has broken out to the upside on a big pick up in volume. The breakout was triggered in part by the stock becoming part of the S&P 600 index. That brings in institutional buying linked to the index.

We see potential for more on the upside and are targeting ILPT for a  move to $26 within the next few months, or sooner. The stock is most suitable for conservative bulls.

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