EPR Properties (EPR - $70.64 – NYSE) (EPR, Financial) is a real estate investment trust (REIT) that owns entertainment-oriented properties such as movie theaters, driving ranges, and waterparks, in addition to charter schools. Triple-net REITs have a defensive component to them, and starting in late October, investors broadly rotated toward more cyclical stocks and away from more defensive ones. That rotation was fueled by several factors, including reports at the time of a preliminary trade deal with China and a Federal Reserve Board that had signaled no changes to interest rates. Also, in late November, EPR announced the sale of its charter schools segment and the eventual redeployment of those proceeds into other assets. That sale and redeployment prompted reductions in analyst earnings estimates for EPR for 2020, as the dilution from the asset sale is more predictable than the eventual accretion from new asset purchases.
From Keeley Asset Management's Keeley Mid Cap Dividend Value Fund fourth-quarter 2019 shareholder letter.
