NEW YORK (TheStreet) -- Strategic Hotels & Resorts (BEE) stock is increasing by 0.07% to $14.22 in after-hours trading on Tuesday, after the company's shareholders approved its sale to Blackstone (BX).
Based in Chicago, Strategic Hotels & Resorts is a real estate investment trust that operates hotels across the country, including the Hyatt and Westin brands.
Blackstone Real Estate, which manages about $93 billion in assets, offered to buy the company for $14.25 per share in September. The deal is valued at about $6 billion.
At a meeting earlier today, shareholders approved the deal, which is expected to close on December 11.
Separately, TheStreet Ratings team rates STRATEGIC HOTELS & RESORTS as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate STRATEGIC HOTELS & RESORTS (BEE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BEE's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 16.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- STRATEGIC HOTELS & RESORTS has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, STRATEGIC HOTELS & RESORTS turned its bottom line around by earning $0.68 versus -$0.11 in the prior year.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, STRATEGIC HOTELS & RESORTS's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for STRATEGIC HOTELS & RESORTS is currently extremely low, coming in at 14.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.56% significantly trails the industry average.
- You can view the full analysis from the report here: BEE
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.