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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Motley Fool: Retail Opportunity looks like smart investment

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Investors seeking income should consider REITs (real-estate investment trusts), and among REITs, Retail Opportunity Investments Corp. (Nasdaq: ROIC) deserves consideration.

A REIT is a public company that invests in real estate. Many REITs have particular focuses, such as health-care properties, apartments or office buildings. REITs aim to buy properties that are underpriced and won’t have problem finding tenants. They also get to be tax-exempt if they pay out at least 90 percent of their earnings in the form of dividends.

Retail Opportunity raises money by selling shares to the public, and it uses that money to buy shopping centers, improve their performance and collect rent. Ideally, it will also sell the land for significant gains.

Our analysts like the company’s CEO, Stuart Tanz, who has been buying up shopping center properties in the depressed markets of the American West. Revenue has increased from around $46,000 in 2009 to $51.7 million in 2011. Over the last four quarters alone, that number has jumped to almost $65 million.

Just as important, the company is now turning a solid profit, most of which will be delivered to shareholders.

Retail Opportunity recently offered investors a respectable 4.5 percent dividend yield. (The Motley Fool owns shares of Retail Opportunity and our newsletters have recommended it.)

Ask the Fool

Q. Where can I look up how much a stock traded for on a particular day some years ago? – S.S., Spokane.

A. Try calling the company’s investor relations department and asking. Another good resource is your public library, where librarians can help you look up the price in newspaper archives or elsewhere.

If you’re online, it’s much easier. Click over to finance.yahoo.com, type in the company’s ticker symbol, and once you get its quote page, click on the “Historical Prices” link in the blue box on the left side of the page.

My dumbest investment

Decades ago, when I began following stocks, I wanted to invest in a name I recognized. Berkshire Hathaway stock cost a few dollars per share, and all I knew about it was that it made shirts. To my everlasting regret, I didn’t buy any – but at 12 years old I didn’t have much money of my own and only watched stocks and dreamed about owning them. Just proves that the best time to start investing is as early as possible. – M.S., Danville, Calif.

The Fool responds: You may be surprised to learn that “Hathaway” shirts were not made by Berkshire Hathaway, which began as a textile company. You’re right, though, that starting early is a great way to build wealth. You needn’t get in on a great company at the beginning, though.

With Berkshire’s Class A shares recently trading near $130,000 per share (you read that right), you’d have done well to have bought at $100 or $1,000 or even $100,000. (Class B shares are far more accessible, though, near $87.) Even a slow grower can serve you well, if you give it decades.