On Aug. 31 of this year, real estate investment trusts (REITs) will no longer bundled with “financials” as an industry classification, but will be in their own unique category known as “real estate” instead.
Will the coming change bring in a flood of fresh investor consideration? It’s tough to say — but it certainly can’t hurt.
Some of the best performers have been data, tower and apartment REITs — all of which have provided returns outpacing the broader equity markets over the past year.
Instead of chasing the top performers, though, we’ll use the Technical Event Screener feature of Profit Scanner powered by Recognia to zero in on REIT plays where the timing makes sense for investors to consider establishing a position.
What’s nice about the software is the fact that the screener already has “REITs” as an industry dropdown in the advanced filter list of options.
REITs to Buy: Ashford Hospitality Trust, Inc. (AHT)
Ashford Hospitality Trust, Inc. (NYSE:AHT) is a REIT that operates through direct hotel investments segment, focusing on full-service upscale hotels based in the United States. And it’s also the first stock we’ll analyze today using Profit Scanner’s event finder capabilities.
In this case, AHT is currently breaking up and out of a bullish symmetrical triangle pattern.
In the chart above, you can see the short-term development playing out. The zig-zagging price activity within the symmetrical triangle shows how price respects the upper and lower boundaries in the pattern … at least, until the tightening consolidation pressure becomes so great that a resolution is forced to break the stalemate between the bulls and bears.
While the development is bullish, there is a bit of overhead resistance to be found at $5.93, and higher above at $6.50 per share, where Profit Scanner has chosen to give a conservative price target. With the stock currently trading around $5.73 per share, gains based on the profit target would yield investors a 13.4% return.
REITs to Buy: Five Oaks Investment Corp (OAKS.A)
Five Oaks Investment Corp (NYSE:OAKS.A) is a company focused on investing in, financing and managing a leveraged portfolio of mortgage-backed securities (MBS). Its dealings include non-agency and agency residential mortgage-backed securities (RMBS), Multifamily MBS, residential mortgage loans, mortgage servicing rights and other mortgage-related investments.
As shown in the chart above, the stock is rebounding after having gone through turbulent times. After falling from just above $25 per share last summer to just $11 back on Jan. 20 of this year, clear skies seem to be in the foreseeable future. The opportunity that exists before us can be found in the fact that the recovery has yet to fully complete.
OAKS-A is running into some intermediate-term resistance in the $20-$21 price range. Hence, the stock began to consolidate there prior to making another big move to the upside. The pattern is similar to the symmetrical triangle above, but much larger and known as a “bottom triangle” because of its proximity to the major bottom established at the beginning of the year.
And, as you can see, price is just beginning to break out of the triangle formation, signaling that it’s time to get back on board. Profit Scanner not only tells us the exact time to get in via event alerts, but also gives us a target range to aim for. In this case, we’re given a conservative price target of $25.50 per share, which if realized would result in a 39.3% gain.
Keep in mind that this is an intermediate-term price target and will likely take longer to achieve when compared to the short-term opportunity we mentioned with AHT above.
REITs to Buy: Corenergy Infrastructure Trust Inc (CORR)
Corenergy Infrastructure Trust Inc (NYSE:CORR) is a REIT focused on acquiring and financing midstream and downstream real estate assets in the U.S. energy infrastructure sector.
The company is also going through a recovery after having been slapped down to earth over the timeframe similar to what we saw with OAKS-A above.
In the last chart here, we have another symmetrical triangle pattern — no surprise there. With multiple layers of resistance above, upside potential could get a little tricky. Profit Scanner tells us that the conservative end of the intermediate-term price target range is $25.30, which happens to be 15.5% above current price levels.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.