Macroaxis Stories

Should we be locking in Office or SL Green?

June 4, 2024  By Raphi Shpitalnik
Macroaxis Story
They say the best investment on earth is earth itself, and SL Green Realty Corp., a titan in the REIT - Office industry, is a testament to this. With a robust current ratio of 3.08X and a total asset base of $9.53 billion, the company has demonstrated its financial stability and resilience. However, it's not all rosy; the company reported an operating income of $51.1 million, but a return on equity loss of 0.11, indicating some challenges in profitability. As we delve into the prospects of investing in this NYSE-listed company, we'll explore whether it's the right time to capitalize on commercial real estate through SL Green Realty stock. Office Properties appears to be recovering faster than SL Green Realty, as its price only dropped by 2.18% today compared to SL Green's 0.02%. As more millennials show interest in diversified REITs, we will focus on SL Green and Office Properties as potential short-term trades. We will also examine some competitive aspects of both SLG and Office Properties.
Published over six months ago
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Reviewed by Rifka Kats

Analyzing key indicators for SL Green and Office allows for a comparison of how market volatility affects each company's stock price. This can help determine if combining them in a portfolio could diversify market risk. Pair trading strategies can also be useful, such as matching a long position in Office with a short position in SL Green. For more details, check our pair correlation module. Let's examine their assets. Asset utilization refers to the revenue generated for each dollar of assets reported by a company. The current return on assets for SL Green suggests that the company's asset usage was not very effective in June.

Main Takeaways

SL Green Realty, a prominent player in the REIT - Office industry, has shown a promising five-year return of 4.84%, indicating a steady growth potential for long-term investors. Despite a profit margin loss of 0.55, the company's robust current ratio of 3.08X signifies its ability to meet short-term obligations, making it a potentially safe bet for investors seeking stability in the commercial real estate sector.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in SL Green. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its performance over time. Several factors influence the investment perspective on SL Green, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.

How important is SL Green's Liquidity

SL Green financial leverage refers to using borrowed capital as a funding source to finance SL Green Realty ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. SL Green financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to SL Green's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of SL Green's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between SL Green's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for SL Green, but it might be worth checking our own buy vs. sell analysis

SL Green Gross Profit

SL Green Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing SL Green previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show SL Green Gross Profit growth over the last 10 years. Please check SL Green's gross profit and other fundamental indicators for more details.

An Additional Perspective On SL Green Realty

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Now, let's check SL Green revenue. Based on the latest financial disclosure, SL Green Realty reported 913.71 M of revenue.
This is 39.75% lower than that of the Diversified REITs sector and significantly higher than that of the Real Estate industry. The revenue for all United States stocks is 90.32% higher than that of SL Green. As for Office Properties we see revenue of 533.55 M, which is much higher than that of the Real Estate
SLG913.71 Million
Sector0.0
Office533.55 Million
913.7 M
SLG
Sector
533.6 M
Office
"Buy low, sell high" is a classic investment adage that may apply to SL Green Realty, a player in the REIT - Office industry. Despite a challenging year with a net income loss of $503.3 million, the company's book value per share stands at a robust $54.22, while the day typical price is slightly lower at $53.02, indicating potential undervaluation. With a market capitalization of $3.45 billion and total assets of $9.53 billion, SL Green Realty has a solid financial base. The firm's operating margin of 0.42% and cash flow from operations of $229.5 million further underscore its operational efficiency. Given these factors, now may be an opportune time to consider investing in SL Green Realty..

SL Green is projected to stay under $54 in July

SL Green Realty Corp's Information Ratio, a measure of portfolio returns beyond a benchmark, has risen to 0.08, indicating a slightly improved ability to generate excess returns. However, market indicators suggest a potential price drop in the near term. It is projected that SL Green's stock price will remain under $54 in July, based on current market conditions and the company's recent performance trends. Investors are advised to exercise caution and monitor the stock's performance. As of June 4th, SL Green's Risk Adjusted Performance is 0.0573, with a downside deviation of 2.53, and Mean Deviation of 2.17. The technical analysis model allows you to check timely technical drivers of SL Green Realty, as well as their relationship.
It's important to validate SL Green Realty's coefficient of variation, and the relationship between the treynor ratio and semi variance to decide if SL Green Realty is priced adequately. The company's current share price is 53.02. Given that SL Green Realty has a Jensen Alpha of 0.2334, it's advised to double-check SL Green's latest market performance to ensure the company's sustainability.In conclusion, SL Green Realty (SLG) appears to have a solid financial footing to sustain growth, with a valuation market value of $53.02 and a valuation real value of $43.09. However, the analyst overall consensus is a 'Hold', with 10 holds, 2 buys, 3 strong sells, and 3 sells. The analyst target price estimated value is $34.07, with the highest estimated target price at $37.82 and the lowest at $31. This suggests a possible downside price of $48.88 and a possible upside price of $54.2. Therefore, while SLG has the financial resources for growth, investors should be cautious due to the mixed analyst consensus and potential price volatility..

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Editorial Staff

Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of SL Green Realty. Please refer to our Terms of Use for any information regarding our disclosure principles.

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