Legacy Offers Good Value

Article Excerpt

LEGACY HOTELS REIT $8.15 (Toronto symbol LGY.UN; SI Rating: Extra Risk) owns 24 luxury hotels with over 10,700 guestrooms in Canada and the United States, including The Fairmont Royal York in Toronto and the Fairmont Le Château Frontenac in Quebec City. Fairmont Hotels & Resorts Inc. owns 23.7% of Legacy, and manages all of its hotels. In the three months ended December 31, 2005, Legacy’s revenue rose 6.5%, to $198.9 million from $186.8 million. Cash flow per unit rose 50%, to $0.12 from $0.08. Legacy’s units now yield 3.9%. Legacy stands to benefit from an improving economy. This will boost tourism, as well as raise profits at its corporate customers and increase demand for business travel. Advance group bookings for 2006 are ahead of last year. Legacy is cheap in light of its high quality properties, which should help it withstand any unexpected economic downturn. Legacy Hotels REIT is a buy. buy…

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