Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Value Stock Analysis As of 15 July 2023
NYSE: ARE (Alexandria Real Estate Equities, Inc.)
- Alexandria Real Estate Equities is a prominent real estate investment trust (REIT) that focuses on developing and owning properties in the life science and technology sectors.
- The company’s primary business model is creating and managing collaborative and cutting-edge real estate spaces for leading organizations in the life science and technology industries.
- Alexandria provides state-of-the-art facilities that meet the specialized requirements of its tenants, including laboratories, office spaces, and collaborative areas.
- As a REIT, Alexandria generates revenue primarily through rental income from their properties. They enter long-term lease agreements with their tenants, providing a stable and fixed amount of cash flow.
- Top Shareholdings of Alexandria Real Estate Equities:
Holder Shares % Out Value
Vanguard Group, Inc. (The) 27,095,192 15.66% 3,239,772,099
Blackrock Inc. 17,138,718 9.91% 2,049,276,506
Norges Bank Investment Management 15,632,151 9.04% 1,869,136,290
State Street Corporation 10,640,279 6.15% 1,272,258,156
Apg Asset Management US Inc. 7,250,200 4.19% 866,906,411
Principal Financial Group, Inc. 5,984,509 3.46% 715,567,739
Canada Pension Plan Investment Board 4,038,496 2.33% 482,882,965
JP Morgan Chase & Company 3,726,441 2.15% 445,570,549
Geode Capital Management, LLC 3,604,252 2.08% 430,960,410
Victory Capital Management Inc. 3,497,011 2.02% 418,137,604
What we think are PROs of Alexandria Real Estate Equities:
- Portfolio diversification: Alexandria keeps a variety of properties in different markets, which lowers the risk of concentration and offers prospects for expansion and adaptability in various economic climates.
- Strong Tenant Relationships: Alexandria cultivates strong relationships with its tenants through a tenant-centric approach, actively engaging with them and providing the best customer service, leading to high tenant satisfaction and long-term partnerships.
- Stable Cashflow: As a real estate investment trust (REIT), Alexandria generates stable rental income from long-term lease agreements with its tenants, providing a reliable and consistent cash flow stream that benefits investors and ensures security.
- High-quality Properties: Alexandria creates and owns high-quality properties that fit in the modern laboratories, cutting-edge technology infrastructure, and adaptable workspaces, creating a climate that is favorable for tenant success.
- Strategic Locations: By acquiring properties in close proximity to renowned research centers, academic institutions, and innovation hubs, Alexandria offers its tenants collaborative networks, talent, and potential partnerships, facilitating collaboration with growth.
What we think the RISKs are in Alexandria Real Estate Equities:
- Market Volatility: Fluctuations in the real estate market can impact property valuations, rental rates, and occupancy levels, potentially affecting the company’s financial performance.
- Economic Downturn: During economic downturns, demand for real estate may decline, leading to higher vacancies, lower rental income, and reduced property values.
- Tenant Concentration Risk: Dependence on a few major tenants or industries can increase the risk of financial impact if those tenants face financial difficulties or vacate the properties.
- Interest Rate Risks: Changes in interest rates can impact borrowing costs and property valuations, potentially affecting profitability and property financing.
FUNDAMENTALS:
Dividends: Dividend (Yield) = 4.96% (4.17% is industry avg.)
Market Cap. = 20.69B
Beta = 0.949
P/E Ratio = 26.62
52 wk Range = 108.81 – 172.65
Revenue = 2.68B
EPS = 4.49
- Trend: Changing direction from downward to upward
– Taking support at the lower zone from more than the last 6 to 7 years
– First Target is 200 EMA or its first resistance level at 150.
– RSI (Monthly) recovering from lower levels, currently at 43 levels.
– Bouncing from Lower support
– Trading in the high support zone and ready to bounce back.
Entry: 112-120
Target: 160 & 195 & 220
Stoploss: Below 108 (if closed), For long-term holders, 100 will be stoploss.
Our Final Thought:
Alexandria Real Estate Equities have expertise in its niche market and has positioned itself as a trusted partner in the evolving landscape of life science and technology real estate. This stock has the potential to generate regular cash flow for their investors and it distributes its maximum earning in the form of dividends. Due to recession around the world, this stock is corrected from its higher levels as the economy grows and the real estate prices goes up with their rental yield which helps in generating regular cash flow for investors. But in the economic slow down it may not perform well due to low rental yield and low appreciation in properties prices.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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