REITs to Run From

In the aftermath of the credit crisis, most analysts were soured on real estate-related investments, including REITs — Wall Street downgraded them and expected little in the way of revenue or earnings growth. However, as many of them recovered much quicker than analysts expected, these stocks moved up quickly in Portfolio Grade rankings to become “buys” or even “strong buys.” In addition to finding a much-needed source of income, investors also enjoyed strong appreciation as REITs exceeded the Streets expectations and began to attract heavy institutional buying.

Unfortunately, it looks like REITs’ ride might be coming to an end. In the past month, we have downgraded several REITs as their Portfolio Grader rankings have begun to slip: American Capital Agency (NASDAQ:AGNC) downgrade to “C”, Simon Property Group (NYSE:SPG) ranking has fallen back to a “C", Vornado Realty (NYSE:VNO) and Annaly Capital (NYSE:NLY) have joined a growing list of REITs that are ranked either “sell” or “strong sell”.

Source: InvestorPlace

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