Trade of the Day: Mid-America Apartment Communities (MAA)

MAA has a strong chart and an ideal business model for the times

If you’re like me, you’re focusing on contra-trending trades this week. After all, we know that there are stocks that held up well in last week’s sell-off—now, we just have to identify them.

In my research so far, I’ve found quite a few stocks that are worth consideration. I’m especially pleased with Mid-America Apartment Communities, Inc. (MAA)…and, as such, it’s my recommendation for you today.

Mid-America Apartment Communities is an independent real estate investment trust (REIT) that focuses on U.S. markets only. It acquires, develops, redevelops and manages multi-family homes throughout the Southeastern and Southwestern United States, and as of late September, it had properties in 15 states.

MAA shares closed 2015 at $90.81, and at the end of last week, they were trading at $90.26—which was a 0.6% decrease. Considering that the S&P 500 was down nearly 6% at the end of last week, I’d say that MAA held up very well.

And I’m confident that this REIT will continue to outperform the larger indexes. You can see in the graph below that MAA has spent the majority of the past two years above the S&P 500 trend line (the blue dashes), and the data is showing that it will continue to increase over the next couple of months.

REIT Trade of the Day: Mid-America Apartment (MAA)

MAA has other factors on its side, too. First (and most important, in my opinion), it has very good ratings in the Turner Analytics database. The company’s Fundamental Score is 73 out of 100, and its Technical Score is 81 out of 100. It also received full marks for Quarter-Over-Quarter Earnings Growth and Year-Over-Year Earnings Growth, and it’s outperforming its Industry (REIT – Residential) and Sector (Finance).

Second, as I mentioned above, MAA only owns properties within the United States, so the company isn’t adversely affected by the strength of the U.S. dollar or the slowdown in overseas economic growth.

Third, MAA may actually benefit from an economy that is showing signs of a slowdown. As people have less discretionary income, they aren’t able to save for home down payments as quickly as they might like. This leads them to rent longer, and established apartment communities, such as MAA’s properties, tend to be the most popular option for renters.

I’m recommending that you enter this position at $90 or less. Set your stop at $81.01 and your near-term target at $96.50.

Mike Turner and his team of software engineers developed Turner Analytics, a sophisticated software market and trade-timing system that provides unbiased, quantifiable recommendations on thousands of equities and rates, ranks and scores these equities from best to worst in an easy-to-use on-line tool for individual investors. He is also the editor of Signal Investor.

Most recently, Mike launched Quick Hit Trader. This trading service is based on weekly analysis of the 6,000+ stocks and ETFs in his proprietary Turner Analytics computer stock-rating system. Every Monday before the market open, Mike emails subscribers his three best trades for the week, including the buy, sell and target price.


Article printed from InvestorPlace Media, https://investorplace.com/2016/01/reit-trade-of-the-day-mid-america-apartment-communities-maa/.

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