NEW YORK (TheStreet) -- Shares of Home Properties Inc. (HME) are higher by 1.79% to $74.03 on heavy volume in mid-afternoon trading on Monday, after the self-administered and self-managed REIT announced that it is being acquired by the private equity firm Loan Star Funds for almost $7.6 billion.
"We believe this transaction with Loan Star Funds provides our stockholders with compelling value for their investment, consistent with our long term strategy," company CEO Edward Pettinella said in a statement announcing the acquisition.
So far today, 1.54 million shares of Home Properties have exchanged hands as compared to its average daily volume of 528,000 shares.
When the deal is completed Home Properties will be a privately held company. The transaction is expected to close during the 2015 fourth quarter.
Separately, TheStreet Ratings team rates HOME PROPERTIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOME PROPERTIES INC (HME) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 25.3% when compared to the same quarter one year prior, rising from $45.79 million to $57.36 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $89.97 million or 14.63% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.89%.
- You can view the full analysis from the report here: HME Ratings Report