ROIC's value proposition is to acquire unique (not widely marketed) opportunities from distressed or under-capitalized shopping center owners. This focused strategy has enabled the company to capitalize on its extensive network of relationships with retailers, brokers, institutional owners, banks, private owners, and other real estate operators.

Cheap Price + High Quality Assets = ROIC

ROIC has built its strategically-balanced portfolio on west coast markets, notably southern and northern California, Portland, and Seattle. It's no fluke that the company has opted to invest in some of the best markets in the nation. ROIC is considered somewhat of a local sharpshooter as the company seeks to acquire shopping centers with lower occupancy rates and then reposition them to provide more overall yield enhancement.

In addition, ROIC's diverse revenue platform includes some of the "best in class" tenant relationships in the retail industry. For example, ROIC leases to Safeway ( SWY), Kroger ( KR), Albertson's, PetSmart ( PETM), and JPMorgan Chase ( JPM).

Over the past three years ROIC has returned 48.48% and the company's common shares have increased by over 33%. The current common shares are trading at $13.59 per share with a 4.42% dividend yield.

There is no doubt that ROIC has been a very consistent and, most importantly, its free cash flow is ramping up very nicely. As the FAST Graph (below) illustrates, ROIC represents an attractive buying opportunity (the black line shows the price, currently at $13.59), well below the intrinsic value based on funds from operations (FFO - the orange line marked F) as well as the normal P/FFO line (in blue).

Also ROIC's dividend history is beginning to show us a consistent trend of growing dividends (the shaded light blue area is the dividend history). Since going public, we can see that the ROIC has steadily paid and increased dividends and the growth rate has been exceptional. In fact, ROIC is possibly one of the best shopping center REITs today, and with a modest P/FFO yield of 13.5, I consider the shares cheap.

Bottom line: ROIC is a diamond in the rough. With the news of the warrants retiring, it's plain to see that the company is focused on a simplified capital model and in one plain and all important thing: Just think ROIC. Target: $13.59

Source: SNL Financial and FAST Graphs

At the time of publication the author had no position in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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