Premium Essay

Sovran Self Storage Valuation

In: Business and Management

Submitted By kira323
Words 21377
Pages 86
CFA Institute Research Challenge
Hosted by

Local Challenge CFA Society of Buffalo and Rochester
Canisius College

Canisius College – Student Research
Financial Sector, Real Estate Industry
New York Stock Exchange

Sovran Self Storage
Date: 1/11/2015
Ticker - NYSE: SSS

Current Price: $90.90 (1/06/15)
Headquarters: Williamsville, NY

SSS per Share

This report is published for educational purposes only by students competing in the CFA Institute
Research Challenge.

Share Price Movement

Highlights
We initiate coverage on Sovran Self Storage (SSS) with a Hold recommendation based on a one-year target price of $95, offering 4.5% upside from its closing price of $90.90 on January 6, 2015. Our recommendation is primarily driven by:
Management Platform - Sovran has been able to adapt to a changing environment in the self-storage industry through leveraging their economies of scale, utilizing an efficient web-based marketing strategy and integrating their revenue management system. Through these business practices, Sovran has maintained stable profitability and growth
Growth Drivers - Sovran has been able to grow their revenues by improving occupancy rates, increasing pricing power and maintaining a strong acquisition pipeline. As occupancy rates reach mature levels, growth will primarily be driven through acquisitions, for which the Company is well positioned

Note: ^RMZ - MSCI US REIT Index

Market Profile
Closing Price
$90.90
52-Week High / Low
$90.90 / $62.66
Average Volume (3M)
195,935
Diluted Shares Out.
33,867,243
Market Cap
$3.08B
Dividend Yield
3.30%
Beta
0.87
EV / Revenue
13.2x
EV / EBITDA
23.1x
FFO / Share
22.8x
Institutional Holdings
94.15%
Insider Holdings
2.55%

Valuation
DCF Multiples
Estimated Price $95.02 $94.96
Weights
50.0%
50.0%
Target Price
$95.00
Target Price is rounded from…...

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