Under the Radar: Undervalued Assets Wall Street Isn't Talking About

Wall Street enters 2025 singing the same song it has sung for the past few years:

Artificial Intelligence!

Quantum Computing!

FinTech!

Tesla! TSLA

Crypto!

Tech!

More tech!

That is where the action is; as we know, these things can grow forever, and nothing could go wrong.

The business’s more “prominent” folks suggest indexing and a 60-40 mix of stocks and bonds.

Never mind that this exposes you to a massive position in high-multiple tech stocks and low total returns over the next decade.

It is prudent.

All the textbooks say so.

I am more interested in the things Wall Street never talks about.

Wall Street never mentions the type of small banks mentioned last week.

Old economy companies trading for less than the liquidation value of the assets they own are never talked about.

Unless they are doing an IPO that lures buyers willing to pay a high fee, you will never hear closed-end funds mentioned.

When they are out of favor and trading at a discount to the value of the stocks and bonds in the fund and throwing off a high stream of regular income, the big firms and Instant Experts of the internet are as silent as the mice scurrying in the rafters of Trinity Church.

You rarely hear any discussion of real estate aside from the occasional asset allocation scheme that calls for a 10% allocation to Real Estate Investment Trusts for diversification purposes.

No one mentions the Morningstar data that shows that since 1972, REITs have outperformed the S&P 500.

The CREM Benchmarking study never comes up either.

That study clarifies that REITs have outperformed private equity in defined benefit pension plans over the last 25 years.

The instant experts are too busy trying to predict which company will dominate nuclear energy when the new plants are finally turned on and can produce cash flow in future years. They never mention the REITs throwing off growing streams of cash right now.

Wall Street and the Instant Experts only care about what is hot now.

You will hear little mention of portfolios of almost fully leased properties that pay investors a huge amount of cash every quarter.

Broadstone Net Lease BNL is a great example of a collection of properties producing regular cash streams that are being distributed to shareholders as dividends.

Broadstone owns industrial, warehouse, and retail properties across the United States.

The average lease has 11 years to run, and all leases have a 2% escalation clause that helps protect cash flows from inflation.

Its tenants include Nestlé, Carvana, Tractor Supply, and other well-known companies with excellent credit profiles.

30% of its properties are manufacturing facilities making everything from food products to semiconductors.

It has both normal and cold storage warehouse facilities, and it will see increased demand from the remaking of the global supply chain and the continued rise of e-commerce.

All of the properties are net lease properties, which means that tenants pay all maintenance, insurance, and taxes in addition to rent.

Broadstone has an excellent balance sheet, with BBB credit ratings and about twice as much equity as long-term debt.

The REIT maintains plenty of liquidity, so it can withstand all economic turmoil and take advantage of opportunities created by disruptions.

This is not the most exciting story you will hear this year.

It may be the most consistent and profitable over the next several years. The current yield on the shares is about 7.3%, and the shares trade at a fairly steep discount to my internal calculation of net asset value.

None of the chattering experts on the internet will be excited about a collection of retailers we all drive by and use every day of our lives that is throwing off cash, either.

Alpine Income Property Trust PINE is a real estate investment trust (REIT) specializing in owning and managing high-quality, single-tenant retail and office properties. Based in Florida, the company strategically focuses on acquiring net lease assets in thriving markets across the United States.

Alpine emphasizes properties leased to strong, creditworthy tenants, often with long-term, triple-net lease agreements that shift maintenance, taxes, and insurance costs to the tenant.

Its tenants include companies like Walmart WMT, Dollar General DG, 7-Eleven, Bass Pro Shops, Best Buy BBY, and CVS CVS.

Alpine’s properties are also leased on a triple-net basis, so most of the cash collected goes back to shareholders as a dividend.

The yield is currently about 6.6%, and the portfolio of properties is, in my calculation, worth much more than the current price of the shares.

When it comes to investing, boring companies that generate a lot of cash have a better-than-average chance of being wildly profitable investments for patient, aggressive investors.

In the case of REITs, that has been the case for more than five decades.