Apartment Investment and Management Company
) - better known as Aimco - reached a 52-week high of $33.02
towards the end of the trading session on Tuesday, Jul 8, 2014,
thanks to the improving fundamentals of the U.S. apartments sector.
Also, the stock gained momentum following strong first-quarter 2014
The closing price of $32.80 of this real estate investment trust
(REIT) represented a robust year-to-date return of 28.8%. The
average trading volume for the session was over 1.18 million
Despite hitting its 52-week high, this Zacks Rank #3 (Hold)
stock has plenty of upside left, given the further anticipated
healthy recovery in apartment market performance metrics and
expected long-term growth of 6.28%.
The apartment sector is continuing its growth momentum with the
apartment operators enjoying strong pricing power. As per the
market intelligence division of
), the effective rents of new leases rose 1.9% in 100 largest
apartment markets of the U.S. in second-quarter 2014 - an
impressive 14-year high. Rising apartments demand pushed up the
occupancy in these markets to 95.6% as against 95.0% in
With over 1 million households forming each year in the U.S.
primarily due to the increasing echo boomers population, we believe
that the demand for Aimco's properties will remain high in the
Notably, Aimco has a strong portfolio of B/B+ geographically
diversified assets situated among the largest coastal and job
growth markets in the United States. This diversification helps
limit the effect of a significant local downturn, and in recent
years, the portfolio has enabled it to enjoy relatively stable
revenues. Additionally, Aimco is revamping its portfolio through
property sales and reinvesting the proceeds in select apartment
homes with higher rents, superior margins and greater-than-expected
On May 1, 2014, Aimco reported first-quarter 2014 pro forma
funds from operations (FFO) of 50 cents per share, a penny ahead of
the Zacks Consensus Estimate and 2 cents above the year-ago quarter
figure. Results were backed by strong operating portfolio
performance, lower offsite costs and interest expense. Also, Aimco
increased its 2014 pro forma FFO per share guidance range.
Over the last 7 days, the Zacks Consensus Estimate for 2014 and
2015 remained stable at $2.06 and $2.20 per share,
Other Stocks to Consider
Apart from Aimco, other apartment REITs that reached 52-week
highs on Jun 8 include
Essex Property Trust Inc.
Funds from operations, a widely accepted and reported measure
of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.
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