Fewer Assets, High Cash Balance Make Equity Commonwealth An Excellent Defensive Stock, Says Stifel


27% profit every 20 days?

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A heavy cash balance, strong balance sheet and a "fill and flip" rental strategy make Equity Commonwealth (NYSE:EQC) a "prototypical defensive stock," according to Stifel. 

The Analyst

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Stifel's John W. Guinee upgraded Equity Commonwealth from Hold to Buy and modestly raised the stock’s target price from $31 to $32.

The Thesis

EQC has a roughly $2.2-billion cash balance, with net cash comprising over 50 percent of the Chicago-based office REIT’s net asset value, Guinee said in a Thursday note. (See the analyst’s track record here.)

EQC’s "fill and flip" rental strategy of actively selling assets in a still-strong rental environment is a positive defensive catalyst for the stock, the analyst said.

Guinee described the REIT’s strategy as “actively leasing up vacancy at the prevailing market rent with a heavy dose of capex, and then selling the income stream.”

Price Action

At the time of publication, shares of Equity Commonwealth were trading up 2.18 percent at $29.58.

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27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorREITUpgradesPrice TargetAnalyst RatingsReal EstateJohn W. GuineeOffice REITStifel