'Strong Buy' Means Deep Discount

Although STOR has been public for a few years, the company's senior management team (led by CEO Chris Volk) has a 35-year track record, and during that period, the leadership group has invested over $12 billion in over 8,000 properties.

Summary

  • A STRONG BUY suggests that the wider the margin of safety, the lower the risk and the greater potential for gain.
  • Since the Buffett Buy, shares in STOR are up around 27%.
  • I suspect the company will announce another ROBUST dividend bump in the third quarter.

Back in June, I wrote a Forbes article titled Berkshire Hathaway Sees Margin Of Safety With Store Capital. I explained that “Net lease REITs should get a nice boost today thanks to Warren Buffett. More specifically, Berkshire Hathaway (BRK.A) (NYSE:BRK.B) is now a 9.8% owner in Scottsdale-based Store Capital (STOR). Berkshire Hathaway has invested $377 million in Store.”

On the news STOR’s CEO, Chris Volk, explained,

"Berkshire Hathaway's investment solidly positions STORE for continued growth, while adding measurably to our already strong financial position. An investment in our company from one of history's most admired investors represents a vote of confidence in our experienced leadership team and an affirmation of our profit-center real estate investment and management approach."

Since the Buffett Buy, shares in STOR are up around 27%:

Just over a month before the Buffet BUY, I wrote an article on STOR, upgrading shares in the company from a BUY to a STRONG BUY.

It certainly doesn’t hurt to have Berkshire Hathaway validate my STRONG BUY recommendation. I take pride in the “STRONG BUY” picks, the word “STRONG” suggests that the company has excellent fundamentals with a wide margin of safety.

Simply put, a STRONG BUY suggests that the wider the margin of safety, the lower the risk and the greater potential for gain. Although STOR’s margin of safety is not as wide today, thanks to the Buffett Bump, this Net Lease REIT has plenty of dividend power.

A Unique Player

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