Host Hotels & Resorts (HST), a premier luxury and upscale property owner, recently announced plans to sell up to $400 million worth of common shares to increase its liquidity and repay debt.

Based on the current share price, the company could sell nearly 40 million shares. Host Hotels will offer its shares in one or more selling periods, none of which would exceed 10 consecutive trading days.

The company expects to utilize the cash for potential acquisitions from distressed sellers who are unable to refinance their properties. In its conference call in July, management hinted at significant acquisition activities over the next two years. With considerable cash in its kitty, Host Hotels can capitalize on favorable market opportunities.

Stock prices of Host Hotels soared 26% since late July. In fact, during the past month, stocks of hotel companies outperformed the broader stock market. According to the data released by National Association of Real Estate Investment Trusts, hotel stocks that are structured as REITs (real estate investment trusts) were up 11% during the last three weeks.

The continued positive momentum of the stock prices of Host Hotels supplements the recent equity offer, which is aimed at a further expansion of the company.

Zacks Investment Research
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