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...The pace of investment has been torrid. Amazing.

Would you say that's why their EBIT margin, profit margin, and a few other figures are in the negative?

Frankly, none of those measures are meaningful yet. They are still in acquisition mode - and making acquisitions incurs one-time costs (think legal fees, etc). All those costs are one-time-only per hotel, and they are taken out up front.

Also, PEB is acquiring top-notch hotels that haven't been loved by their previous owners as late. Hotel owners defaulting on their debt aren't spending money on repairs or upgrades, and many of the hotels PEB is picking up on the cheap have several years of past-due maintenance to make up for. The company also upgrades, repositions, or rebrands some of its newly-acquired hotels. All that translates into higher capex spend, but of course that higher capex will only last 3-18 months or so per property before settling back towards a much-lower maintenance level.

PEB hasn't owned a single hotel for a full year yet, so every single item on their financials should be taken with a grain of salt at best or completely disregarded as unrepresentative of the future at worst. When valuing PEB (or companies similar to PEB), it is important to value its potential futures - the various places it could be several years out - and then discount those possible realities back to the present and weight their likelihoods.

I hope this helps. If I can help clear anything else up for you, please don't hesitate.

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