I mostly got out of the multifamily trade earlier this year, by selling out of MAA. MAA was a position built from shares of CLP that were swapped out in a merger between the two companies. CLP and AEC were an investment I had made in the multifamily space in 2011, betting that rental occupancy would remain at record highs and rents would experience pressure, while more generally mortgage generation and homeownership would continue to languish.
That worked out pretty swimmingly.
But I did make one…I wouldn’t call it a mistake, per say, but…misjudgment. I did not anticipate how much the street hates AEC.
I guess AEC’s CEO got on the dark side of Wallstreet back in the late 90’s. Not just Wallstreet; I had some people perchance on my articles hyping up AEC who hated the CEO so much, they took the time to tell me and anyone else reading. I guess I can respect that. Blackballing those that have crossed you is an American tradition of sorts. I do it all the time. No big deal.
But I was willing to give AEC a chance, and it has mostly paid off as well. In addition to collecting 5% annually for four years, AEC is now up about 35% from my entry price. Not an APC or RGR or HCLP by any means, no. But respectable.
AEC is up 7% today, continuing a big push it has been making in the second half of this year. AEC has been trading at a serious discount to its peers in terms of stock premium, but has been making moves to force recognition of that value.
If AEC can hit above $23, that will have put AEC at effective returns of about 16% compounded annually, since 2011. Not bad, I can live with that.
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Cain — Haven’t you been talking about AEC since sub 14? I thought so… that’s 50%… anyways, wish I had joined you on this one. Nicely done
Yes but my initial purchase price was in the $15 range.
Cain Hammond Thaler does not bullshit glory through averaging in. He gives it to you straight, despite the gains from averaging down being very real.
I entered on a dip after the activist shareholder rattled the board’s cage earlier this year. I owe you a tip of the hat for that one. It wouldn’t have been on my radar but for your writings.
I love a good proxy fight. I took off 1/4 of my position late today, will let the rest ride. If the board doesn’t want to sell the company, shareholders can always hire a board that will.
As always, your servant, sir.