HTA - Embedded Expectations Analysis - 2018 09 24
Healthcare Trust of America, Inc. (HTA:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Assets, with a 1.9x Uniform P/B. However, even at these levels, the market has bullish expectations for the firm, but management is concerned about their investments, paying down mortgage debt, and leasing spreadsSpecifically, management may lack confidence in their ability to sustain operational performance, particularly related to leasing and development. They may also lack confidence in the potential of their investments, and may be exaggerating the strength of their Greenville acquisition. Furthermore, they may lack confidence in the potential of their all-inclusive solution platform for healthcare system partners, and their $300mn stock repurchase plan. Moreover, they may lack confidence in their ability to increase rent spreads, and may be concerned about the lease-up of their Forest Park assets. Additionally, they may lack confidence in their assertion that they will not need to begin searching for new tenant relationships anytime soon. Finally, they may be concerned about the amount of mortgage debt they must pay down, and may lack confidence in their ability to find acquisitions to drive incremental growth in their property management platform
Healthcare Trust of America is a real estate investment trust. The company focuses on owning and operating medical office buildings that serve healthcare delivery and are located on health system campuses, near university medical centers, or in community core outpatient locations. The company's properties include health systems, such as Baylor Scott & White Health, Highmark-Allegheny Health Network, Hospital Corporation of America, Tenet Healthcare System and Community Health Systems.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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