Chatham Lodging Trust Stock Upgraded (CLDT)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Chatham Lodging (NYSE: CLDT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 29.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.21% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CLDT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CHATHAM LODGING TRUST has improved earnings per share by 10.0% 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 year. We feel that this trend should continue. During the past fiscal year, CHATHAM LODGING TRUST continued to lose money by earning -$0.13 versus -$0.66 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$0.13).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 69.6% when compared to the same quarter one year prior, rising from $1.50 million to $2.54 million.
  • Net operating cash flow has significantly increased by 139.98% to $9.84 million when compared to the same quarter last year. In addition, CHATHAM LODGING TRUST has also vastly surpassed the industry average cash flow growth rate of 8.56%.

Chatham Lodging Trust was formed as a Maryland real estate investment trust (REIT) on October 26, 2009. The Company is internally-managed and was organized to invest primarily in premium-branded upscale extended-stay and select-service hotels. Chatham has a market cap of $532.2 million and is part of the financial sector and real estate industry. Shares are down 1.2% year to date as of the close of trading on Thursday.

You can view the full Chatham Ratings Report or get investment ideas from our investment research center.

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