No. of Recommendations: 0
I posted this earlier on "Foolish question", but it probably more properly belongs here:

I'm looking at a stock that's an REIT for a small motel chain. I'm pretty new at this whole stock picking thing, so pardon me if this is a stupid question.

The numbers really look pretty good. P/E about 18, and a PEG of .24(!), although 1 year forward is the furthest projection I can find. FFO seems to be steadily going up as well.

The "worst" thing I can see is that they tend to issue new stock to finance expansion, in fact about 80% of the credit side of the balance sheet is equity.

Is it valid to use earnings growth to try and value a REIT? Are there other issues I ought to be worried about?

This LOOKS like a really good value, but I guess I'm afraid I'm missing something, as the stock price hasn't moved much in a while even though EPS has steadily been going up, even with the issuance of additional stock.

What might I be missing?

Lee Taylor
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