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Is this Large Market Cap Stock target price reasonable for Sunstone Hotel Investors Inc. (NYSE:SHO)?

The company in question is, Sunstone Hotel Investors Inc. (NYSE:SHO) currently with a stock price of 12.81 (-0.08% today). The market cap for Sunstone Hotel Investors Inc. is 2822.32, and is in the sector Financial, and REIT РHotel/Motel industry. The target price for Sunstone Hotel Investors Inc. is 14.14. Currently Sunstone Hotel Investors Inc. is trading with a P/E of 8.13, and a forward P/E of 26.27. Average volume for Sunstone Hotel Investors Inc. is 2273.71 and so far today it is 750635.

Performance in the last year for Sunstone Hotel Investors Inc. has been -0.69%. For EPS growth, Sunstone Hotel Investors Inc. has seen a growth of 350.10%, and is looking to grow in the next year to 1.24%. More long term stats show that EPS growth has been 38.00% over the last five years and could be 1.93% for the next five years. Sunstone Hotel Investors Inc. has seen sales growth quarter over quarter at -48.30%, with EPS growth quarter over quarter at 21.00%. The 20-day simple moving average is -2.08%, with the 200-day simple moving average coming to 1.97%.

Since the IPO date for Sunstone Hotel Investors Inc. on the 10/21/2004, Sunstone Hotel Investors Inc. has seen performance year to date to be 3.90%. With Sunstone Hotel Investors Inc. trading at 12.81, the dividend yield is 1.56%, and the EPS is 1.58.

So could Sunstone Hotel Investors Inc., be undervalued? Well as said before P/E is 8.13. The PEG is 4.21, P/S is 2.31 and the P/B is at 1.2. The P/cash is 7.96, with P/free cash flow at *TBA.

Sunstone Hotel Investors Inc. ability to deal with debt shows that the current ratio is 1.3, and the quick ratio is 1.3. This is with long term debt/equity at 0.33, and total debt/equity at 0.44.

In terms of margins, Sunstone Hotel Investors Inc. has a gross margin of 63.70%, an operating margin of 14.30% and a profit margin of 28.20%.Payout ratio for Sunstone Hotel Investors Inc. is 85.30%. Return on assets come to 9.10% with return on investment coming to 5.30%.

Insider ownership for Sunstone Hotel Investors Inc., is at 0.30% and institutional ownership comes to *TBA. Outstanding shares are at 220.15. While shares float is 214.9. The float short is currently 5.23%, and short ratio is 4.94.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Stephen Butters

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