Retail Opportunity Investments Corp. (ROIC) | Investment Case

1. Company Snapshot

1.a. Company Description

Retail Opportunity Investments Corp.(NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast.As of September 30, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 million square feet.

ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast.ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services, S&P Global Ratings, and Fitch Ratings, Inc.

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1.b. Last Insights on ROIC

Retail Opportunity Investments Corp.'s recent performance was driven by its Q3 2024 earnings release, which showed a strong financial and operating performance. The company reported a 3.4% increase in same-store NOI and a 4.1% increase in same-store rent growth, driven by a strong retail environment and effective property management. Additionally, the company's acquisition of new properties and its focus on enhancing its portfolio through redevelopment and repositioning efforts are expected to drive future growth. The proposed sale to Blackstone for $17.50 per share in cash has also been a significant development, with several law firms investigating the fairness of the price and process.

1.c. Company Highlights

Last Price	17.49
Change Percentage	0.00%
Open	17.5
Previous Close	17.49
Market Cap ( Millions)	2255
Volume	4300723
Year High	17.52
Year Low	11.87
M A 50	17.42
M A 200	15.2

FCF Yield	3.97%
Dividend Yield	0.86%
ROE	3.08%
Debt / Equity	118.85%
Net Debt / EBIDTA	1105.33%
Price To Book	1.71
Price Earnings Ratio	56.28
Price To FCF	25.17
Price To sales	13.52
EV / EBITDA	27.89

2. Transcript Summary

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3. NewsRoom

Miss These Genesis Mission Stocks, and You’ll Regret It for a Decade

Dec -01

Source: investorplace.com

MS Global Franchise Portfolio's Strategic Moves: Synopsys Inc. Takes Center Stage

Nov -26

Source: gurufocus.com

Retail's Comeback: 3 High-ROIC Stocks That Could Outshine AI

Jul -27

Source: marketbeat.com

These 2 Tech Stocks With 50%+ ROIC Are Built to Beat the Market

Jul -24

Source: marketbeat.com

Tenet Healthcare: Active Returns Analysis

Mar -20

Source: seekingalpha.com

Retail Opportunity Investments Corp. Stockholders Approve Acquisition by Blackstone Real Estate

Feb -07

Source: globenewswire.com

WELL Provides Corporate Update on Financial Performance of Acquired Canadian Clinics and Confirms Favourable Positioning Amidst Escalation of Tariffs between the US and Canada

Feb -03

Source: prnewswire.com

The State Of REITs: January 2025 Edition

Jan -23

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Rental

Expected Growth: 3.0%

Rental growth of 3.0% driven by increasing demand for retail space, particularly in high-growth markets, coupled with strategic acquisitions and dispositions by Retail Opportunity Investments Corp. Additionally, the company's focus on necessity-based retail and grocery-anchored centers supports stable and growing cash flows.

Other

Expected Growth: 3.0%

Strong demand for retail spaces, increasing occupancy rates, and rising rents drive growth for Retail Opportunity Investments Corp. Additionally, strategic acquisitions, effective cost management, and a solid balance sheet contribute to the company's 3.0% growth.

7. Detailed Products

Grocery Anchored Centers

Retail Opportunity Investments Corp. specializes in acquiring and managing grocery-anchored shopping centers, providing a convenient and essential shopping experience for local communities.

Community Centers

The company invests in and manages community centers that offer a mix of retail, dining, and service-oriented tenants, serving as hubs for local activity and social interaction.

Power Centers

Retail Opportunity Investments Corp. develops and manages power centers, featuring a mix of big-box retailers, restaurants, and entertainment options, catering to a broad range of consumer needs.

Lifestyle Centers

The company creates and manages lifestyle centers that combine upscale retail, dining, and entertainment options, offering a unique and engaging shopping experience.

8. Retail Opportunity Investments Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Retail Opportunity Investments Corp. is medium due to the presence of alternative investment options in the market.

Bargaining Power Of Customers

The bargaining power of customers for Retail Opportunity Investments Corp. is low due to the lack of concentration of buyers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Retail Opportunity Investments Corp. is medium due to the moderate concentration of suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Retail Opportunity Investments Corp. is high due to the low barriers to entry in the market.

Intensity Of Rivalry

The intensity of rivalry for Retail Opportunity Investments Corp. is high due to the high level of competition in the market.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	52.19%
Debt Cost	5.12%
Equity Weight	47.81%
Equity Cost	11.06%
WACC	7.96%
Leverage	109.15%

11. Quality Control: Retail Opportunity Investments Corp. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

NETSTREIT

A-Score: 6.7/10

Value: 3.0

Growth: 6.2

Quality: 6.2

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Getty Realty

A-Score: 6.2/10

Value: 3.1

Growth: 4.6

Quality: 6.5

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

Saul Centers

A-Score: 6.1/10

Value: 5.7

Growth: 3.6

Quality: 6.1

Yield: 10.0

Momentum: 2.0

Volatility: 9.3

1-Year Total Return ->

Whitestone REIT

A-Score: 5.8/10

Value: 5.0

Growth: 4.3

Quality: 6.5

Yield: 7.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

Acadia Realty

A-Score: 5.1/10

Value: 2.6

Growth: 2.9

Quality: 4.9

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

Retail Opportunity Investments

A-Score: 5.0/10

Value: 2.8

Growth: 4.6

Quality: 5.8

Yield: 4.0

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.11%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.96%

Retail Opportunity Investments Corp. - US76131N1019

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ROIC

1.c. Company Highlights

Medium Volatility

Fairly Valued

Average Quality

Earnings Beats

Revenues Beats

Stable Momentum

Average Yield

Average Growth

Earnings Miss

Strong Momentum

Expensive

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Rental

Expected Growth: 3.0%

Other

Expected Growth: 3.0%

7. Detailed Products

Grocery Anchored Centers

Community Centers

Power Centers

Lifestyle Centers

8. Retail Opportunity Investments Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Retail Opportunity Investments Corp. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.49$

Current Price

17.49$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA