We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Monmouth (MNR) Moves 6% Higher on Acquisition News: Will This Strength Last?
Read MoreHide Full Article
Monmouth Real Estate (MNR - Free Report) shares ended the last trading session 6% higher at $19.35. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.5% gain over the past four weeks.
This increased investor optimism can be attributed to the news of its acquisition by Equity Commonwealth (EQC - Free Report) in an all-stock transaction worth $3.4 billion, including the assumption of debt. Monmouth shareholders will get 0.67 shares of Equity Commonwealth stock for every share they own. Based on the closing stock price on May 4, the transaction values Monmouth at $19.40 per share, or 6.3% premium to its closing price of $18.25.
Moreover, the merger agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of 18 cents per share. As a result, Monmouth shareholders will receive a total consideration of $19.58 per share in the transaction.
The combined entity is likely to have a pro forma equity market capitalization of $5.5 billion. The combined company is poised to benefit from stable recurring cash flows on the back of healthy fundamentals of the industrial real estate market, as well as enjoy substantial resource for future acquisitions. The transaction is expected to close in the second half of 2021. However, as MNR rallied to end the last trading session at $19.35, a little lower than what Equity Commonwealth has offered, there is just a marginal upside in the stock.
Price and Consensus
This industrial real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.21 per share in its upcoming report, which represents a year-over-year change of +5%. Revenues are expected to be $45.8 million, up 9.8% from the year-ago quarter.
While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.
For Monmouth, the consensus FFO per share estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions.
Image: Bigstock
Monmouth (MNR) Moves 6% Higher on Acquisition News: Will This Strength Last?
Monmouth Real Estate (MNR - Free Report) shares ended the last trading session 6% higher at $19.35. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.5% gain over the past four weeks.
This increased investor optimism can be attributed to the news of its acquisition by Equity Commonwealth (EQC - Free Report) in an all-stock transaction worth $3.4 billion, including the assumption of debt. Monmouth shareholders will get 0.67 shares of Equity Commonwealth stock for every share they own. Based on the closing stock price on May 4, the transaction values Monmouth at $19.40 per share, or 6.3% premium to its closing price of $18.25.
Moreover, the merger agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of 18 cents per share. As a result, Monmouth shareholders will receive a total consideration of $19.58 per share in the transaction.
The combined entity is likely to have a pro forma equity market capitalization of $5.5 billion. The combined company is poised to benefit from stable recurring cash flows on the back of healthy fundamentals of the industrial real estate market, as well as enjoy substantial resource for future acquisitions. The transaction is expected to close in the second half of 2021. However, as MNR rallied to end the last trading session at $19.35, a little lower than what Equity Commonwealth has offered, there is just a marginal upside in the stock.
Price and Consensus
This industrial real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.21 per share in its upcoming report, which represents a year-over-year change of +5%. Revenues are expected to be $45.8 million, up 9.8% from the year-ago quarter.
While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.
For Monmouth, the consensus FFO per share estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>