MLV & Co Analyst Richard Eckert says NorthStar Realty Finance Corp (NRF) is his top stock recommendation right now. He says it is almost more of an equity REIT at this point.
“Over 80% of Northstar’s income now comes from equity investments, from direct investments in real estate, and I don’t think the market recognizes that,” Eckert says. “They’re still being traded like a mortgage REIT, when in fact they’ve already been included in the RMZ, which is an equity REIT index.”
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Eckert says he has broken out an estimated NAV for each of the individual property portfolios, and when added up, the total is a lot more than what the they are trading at now. He says that makes the stock what he considers several undervalued portfolios with a near-term catalyst.
“The spinoff of Northstar’s internal manager last year, Northstar Asset Management (NSAM), created a lot of value. When I initiated on NorthStar — I think that was April 21, 2014 — it was trading for roughly $16 a share,” Eckert says. “A person owning NorthStar at $16 a share on that date now holds two securities that are worth nearly $40, NorthStar and NorthStar Asset Management.”
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