Real Estate Investors' Dream Stocks

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.

There is a tool that offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS.

We've enlisted CAPS to screen for top real estate stocks and get the story behind them. CAPS' nifty screener will help us find stocks with:

  • A market cap of at least $100 million.
  • A three year revenue growth rate of at least 20%.
  • A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our 115,000-plus CAPS investors to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.

Company

Revenue Growth Rate, Past 3 Years

CAPS Rating (out of 5)

LoopNet (Nasdaq: LOOP  )

57.7%

*****

Anthracite Capital (NYSE: AHR  )

33.3%

*****

Jones Lang Lasalle (NYSE: JLL  )

26.5%

*****

Health Care REIT (NYSE: HCN  )

22.5%

*****

Data and star rankings from CAPS. All data as of Aug. 15.

LoopNet
LoopNet's online commercial real estate marketplace has the largest network of its kind, connecting buyers and sellers in a way akin to the eBay (Nasdaq: EBAY  ) model. Virtually every top commercial real estate firm uses the site, with its premium subscription model providing the majority of its revenue. Despite a 12% drop in earnings for its second quarter, LoopNet is still growing strong; revenue rose 29% and the site now has 3 million members. A lower share price is only one of five reasons Fool Rick Munarriz sees to buy LoopNet today, and many CAPS members agree, with 97% of the 1,985 believing LoopNet will outperform the market going forward.

Anthracite Capital
Some investors think real estate investment trust Anthracite Capital has been dragged down with the rest of the sector unfairly, as it has lost nearly 40% of its value in the past year. But as the Federal Reserve continues to step in and ensure the liquidity of the capital markets, some see the potential for things to change for the better. To better navigate the tough investment market, Anthracite cut expenses by 8%, helping bring its second-quarter profit up 22% to $25.2 million. And over the past 12 months the company has pursued investment opportunities in markets mostly outside the U.S., although as U.S. pricing levels continue to decline, more domestic opportunities are appearing. Even in a tough real estate market, 97% of the 264 of CAPS members expect Anthracite Capital to outperform the market.

Jones Lang LaSalle
Management services provider Jones Lang LaSalle has a large global presence and operates in more than 100 markets in 50 countries. With about two-thirds of its revenue coming from outside the U.S., the company isn't feeling the effects of the current credit market troubles as much as the next guy. With shares down 30% year-to-date, many long-term investors see a buying opportunity with its big, global client list featuring clients like Merrill Lynch (NYSE: MER  ) and Motorola (NYSE: MOT  ) . CAPS members largely agree, with 98% of the 745 rating Jones Lang LaSalle expecting it to outperform the market.

Health Care REIT
As a real estate investment trust specializing in health-care facilities, Health Care REIT has proven to be a safe harbor for investors in a nasty real estate market, with a decent 9% return for 2007. In general, REITs specializing in health care have strong balance sheets and continue to expand their development pipelines as lenders are more willing to provide them credit. Riding larger trends of aging baby boomers and paying a nice dividend that currently yields 5.2% has kept investor interest in Health Care REIT high. And CAPS reflects this, with 96% of the members rating Health Care REIT an "outperform."

Let 115,000 members be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.

Want to run your favorite parameters through the CAPS screener? You can even give your own opinion -- both good and bad -- on any company you wish in Motley Fool CAPS.

eBay is one of dozens of stocks recommended to Motley Fool Stock Advisor subscribers. To see all the stocks that have helped Tom and David Gardner beat the market by 42 points on average, take a free 30-day trial.

Fool contributor Dave Mock dreams of stocks and sugarplum fairies, but not together. He owns shares of Motorola and is the author of The Qualcomm Equation. LoopNet and Jones Lang Lasalle are Hidden Gems recommendations. Health Care REIT is an Income Investor selection. LoopNet is a Rule Breakers pick. The Fool's disclosure policy screens the good, the bad, and the ugly.


Read/Post Comments (1) | Recommend This Article (5)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2009, at 2:22 PM, gbaker50 wrote:

    I think investing in Health Care REIT is a great recommendation. Commercial real estate seems to be starting to struggle the way residential has recently. Hospitals and medical facilities are always needed, so that seems to be one sector of the real estate market that's somewhat safe.

    Make money in real estate! www.BeALandlord.net

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