The good news coming into 2015 is more millennials are moving out of their parents’ basement. And while more than 30% of 18 to 34 year olds live with mom and dad, as they go into the world to form families, they're still picking apartments over homeownership.
As much as I hope this trend will change, the seeds of construction suggest it’s not going to happen this year. According to the American Institute of Architects, design demand is still focused on multifamily units. In 2014, 10 of 12 months saw demand for design increase. To take advantage of this trend, take a look at Preferred Apartment Communities (NYSEMKT:APTS) -- a REIT paying a yield near 7%, on the cusp of a major breakout.
Earnings consensus is edging higher, but I think the Street is too low. The company has apartments in Texas, Georgia, North Carolina, Virginia, Washington DC and Pennsylvania. My target is $14.00+.
I like it short term, but love it long term.