RLJ Lodging Trust REIT Bounces Off Of New Low

If you purchased real estate investment trusts (REITs) 12 to 18 months ago when people were still talking about inflation being “transitory” and before the rate hikes began, it might have seemed like a good idea. But it’s unlikely you made any money if you’re still holding those investments.

For example, RLJ Lodging Trust RLJ is just beginning to bounce off last week’s 52-week low. The company owns 97 hotels with 21,400 rooms nationwide. Its properties include Courtyard San Francisco Union Square, Embassy Suites by Hilton Atlanta Buckhead and Hyatt Place Washington DC/White House.

The REIT trades at a 24% discount from book value with a price-to-sales metric of 1.32 and price to free cash flow of 7.97. Funds from operations (FFO) growth over the most recent 12-month period comes in at 105%. The rate over the past five years is negative 30.5%. The amount of long-term debt on the books slightly exceeds that of shareholder equity.

The short float of 7.19% suggests that short sellers do not expect RLJ Lodging to trade higher anytime soon. That level is much more elevated than that of most other publicly traded real estate investment trusts – should those short be forced to cover then such conditions could ignite a rally.

Average daily volume for the REIT is 1.61 million shares.

RLJ Lodging pays a dividend of 3.27%.

The daily price chart is here:

As long as it continues to trade so far below both the downtrending 50-day moving average (the blue line) and the downtrending 200-day moving average (the red line), it’s a bearish look. Note that the relative strength indicator (RSI) below the price chart is coming back out of its Oversold range.

Here’s the weekly chart:

From the March 2021 high of $17 to the current $9.91 amounts to a loss of 41% from the peak to the trough. It’s not a good look that the price trades so far below the 50-week and the 200-week moving averages, both of which are trending down. RLJ has managed to stay well above its lows of the pandemic era scare in March and April of 2020.

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