LaSalle Hotel Properties (LHO), a lodging real estate investment trust (REIT), has recently announced that its Board of Trustees has ratified a share repurchase program to buy back common shares worth $100 million. The strategic move is aimed to capitalize on a relatively undervalued share price that seems to be a fallout of the volatility in the market amid fears of a double-dip recession.
During April 2011, when the share price was fairly stable in the range of $25-$28, LaSalle Hotel Properties sold 417,037 common shares through its at-the-market share offering program and an additional 7.9 million shares in an underwritten public offering. The company had utilized the proceeds from the equity issuance to fund its acquisition activities.
As of July 20, 2011, LaSalle Hotel Properties had 85.1 million shares trading in the market. The stock had historically traded between $15.17 and $29.58 in the last 12 months. Currently, the common shares of the company are trading at $18.07.
LaSalle Hotel Properties owns 35 upscale full-service hotels, totaling over 8,700 guest rooms in 13 markets across 9 states in the U.S. and the District of Columbia. Besides improving the size and quality of its portfolio through strategic acquisitions of high-quality hotels, the company plans to continue selling non-core properties that do not fit its long-term strategy.
LaSalle Hotel Properties has a geographically diversified portfolio with high barriers to entry and a strong demand for high-quality facilities. The company focuses on owning, redeveloping and repositioning upscale full-service hotels in urban, resort and convention markets.
We presently have a Neutral recommendation on LaSalle Hotel Properties, which currently has a Zacks #3 Rank that translates into a short-term Hold rating and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months.
We also have a Neutral recommendation and a Zacks #3 Rank for Host Hotels & Resorts Inc. (HST), one of the competitors of LaSalle Hotel Properties.
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
LASALLE HTL PRP (LHO): Free Stock Analysis Report
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