CubeSmart (CUBE): A Value Gem With Upside Catalysts

A handful of technical analysis tools are suggesting that CubeSmart (NYSE:CUBE) overall gets 88% Buy rating. The stock is also flashing a Buy from the Barchart TrendSpotter trading system. Traders hoping to speculate on the CUBE’s short-term trajectory should know that short terms indicators for the stock averaged 80% Buy with an average daily trading volume over the past 20 days at 1266325 shares. CUBE stock has overall a 1% Buy signal considering medium term indicators and the 50-day average daily volume remained almost 1456560 shares. It’s also worth noting that the stock, whose average daily volume over the 100 days prior to this writing was 1447387 shares, is 67% Buy on the basis of long term indicators.

The share price is currently staying around the first support level of $31.06. Below this, the next support is placed in the zone of $30.94. Till the time, the CUBE stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 61.05 on daily chart, which may remain a cause for concern. If the price breaks below $30.94 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $31.37 mark may result into a pull-back move towards $31.56 level.

CubeSmart (CUBE) is projected to climb by -1.31 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $34 price as 12-month high target. This represents a whopping 9.01 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $30, which represents a return potential of -3.82 percent when compared to the closing price of the stock of $31.19 on Monday, February 11. The lowest price target for the stock is $29 — slightly more than -7.02 percent from CUBE’s current share price.

Here’s a rundown of insider trading activity for sense of CubeSmart (NYSE:CUBE). The earliest insider trade took place on 05/08/2018. Perry Jonathan L parted with a total of 70.75 thousand shares of company at average share price of $30.31. The total for the sales was set at $2.14 million. After this transaction, the SVP and CIO account balance stood at 55.63 thousand shares. The stock grew 2.9 percent since that insider sale. On 05/07/2018, Martin Timothy M, CFO, sold 3.74 thousand shares at a price per share of $29.95. This removed 111.95 thousand shares from the insider’s fortune and the stock saw a 4.14 percent rally in value since the news became public. This transaction left 173.02 thousand shares in the CFO account. On 05/07/2018, CEO Marr Christopher P performed a sale transaction worth $6.43 million. This sale at $29.89 each has eliminated 215.27 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 4.35 percent increase since the transaction was reported. The insider now is left with 353.81 thousand shares remaining in the account. Martin Timothy M, who performs the CFO job, sold 57.75 thousand shares for $1.7 million. The disposal occurred on 12/15/2017 was priced at $29.41 per share. The share price soared 6.05 percent since the reporting date. Martin Timothy M now left with a stake of 159.42 thousand CUBE stock worth $4.97 million after the insider selling.

CUBE shares dropped -0.15 points or -0.48 percent on Monday to $31.19 with a heavy trade volume of 1.883 million shares. After opening the session at $31.25, the shares went as high as $31.43 and as low as $31.12, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $5.79 billion and now has 185.53 million shares outstanding. CubeSmart (CUBE) stock has gained 8.34 percent of market value in 21 trading days.

Analysts at Evercore ISI cut their rating on shares of CubeSmart (NYSE:CUBE) from Outperform to In-line in their opinion released on December 18. BofA/Merrill analysts bumped their recommendation on CUBE stock from Neutral to Buy in a separate flash note to investors on November 15. Analysts at Evercore ISI issued an upgrade from In-line to Outperform for the stock, in a research note that dated back to September 10.

CUBE stock has a trailing 3-year beta of 0.33, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.84 a share in the trailing twelve months. The stock’s value has surged 8.71 percent year to date (YTD) against a rise of 23.09 percent in 12 month’s time. The company’s shares still trade -6 percent away from its 1-year high of $33.18 and 23.09 percent up from 52-week low of $25.34. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of CubeSmart (CUBE) are trading at a P/E ratio of 37.19 times earnings reported for the past 12 months. The industry CUBE operates in has an average P/E of 50.57. Its P/E ratio went as low as 39.08X and as high as 499.84 over the 5-year span. Further, it is sporting a 9.85 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.86. 67.4 percent is the gross profit margin for CubeSmart and operating margin sits at 37.5 percent. Along with this, the net profit margin is 26.4 percent.

CUBE will be declaring its Q4 financial results on February 21. Analysts are forecasting revenue to climb 7.4 percent to $154M in the next fiscal quarter, while earnings are seen soaring by nearly 0 percent to $0.22 per share. History has shown that shares in CubeSmart have gone up on 17 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.23 per share, better than the $0.22, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $153M, worse than the $154M analysts expected. Earnings are estimated to increase by 66.2 percent this year, -0.59 percent next year and continue to increase by 6 percent annually for the next 5 years.