The Motley Fool

Tritax Big Box: 4 reasons why the share price is rising and what I’d do now

Image source: Getty Images.

Tritax Big Box (LSE: BBOX), the FTSE 250-listed real estate investment trust (REIT), is hard to miss today. Not only is it the fastest riser among all of the index’s components at the time of writing, up more than 4.5%, the BBOX share price has touched new all-time-highs. 

I think it’s easy to chalk it up as yet another real estate play. Property stocks have gained because of encouraging policies, vaccine development and an amicable end to the Brexit negotiations saga. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

But BBOX is another story. Here are four reasons why:

#1. Logistics play

It’s not so much a real estate play right now as a logistics one. It so happens that Tritax Big Box focuses on warehousing properties. At a time when we have been ordering online, leading to booming sales of e-tailers like Amazon, demand for storage facilities has been rising too.  

This was evident in BBOX’s previous update in October, and I think the uptrend will be further reinforced in the next update later this month. 

#2. BBOX shows strong performance

I wouldn’t be keen on it if it looked healthy only because of the current scenario. That’s not the case, however. Even earlier, it was a profit-making company, which adds to its credentials. 

#3. Long-term prospects look good

Moreover, I think its long-term prospects also look good. The future of shopping is online, as the challenges faced by brick-and-mortar stores make it evident. But lockdowns and the pandemic have accelerated the shift towards online purchases, perhaps even to a greater degree than would have otherwise been anticipated. 

This will impact Tritax Big Box and its peers positively. One example is the FTSE 100 REIT, Segro, which finds itself in a similarly fortunate situation. Its share price, like BBOX, is near its highest ever levels. 

#4. Reasonably priced

Its price-to-earnings ratio at 18 times isn’t exactly small, but it doesn’t look like a bubble either. In fact, for a stock that is currently seeing highest ever price levels, it appears quite muted. 

A word of caution

The only drawback to the stock is in comparison to Segro, which has a slightly lower price-to-earnings ratio. It also has a more international profile. This means that it’s less vulnerable to any economic fluctuations in the UK. 

This is something to remember in 2021, the first year after Brexit. The worst of the corona-crisis is yet to hit the economy, but will become clearer over the year as will any Brexit-related challenges. 

The takeaway

However, over time, I would think that BBOX will come out as a winner. This, I would imagine, would be particularly evident during high-growth years for the UK economy, when consumers spend more. 

I’d buy it and hold it for the next few years

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.