Real estate is all about location. But it can also be about the right building, not just the right place. Combining the two could mean massive value creation, strong cash flows, and a unique property.
Such properties are rare. The Empire State Building is one, combining a prime location with high demand, high foot traffic, and added services like the famed Observation Deck. Other such gems exist, although few are publicly traded.
One such publicly traded play is the entertainment venue Sphere in Las Vegas. It’s held through Sphere Entertainment Corp (SPHR). The new venue offers a unique viewing experience, whether from musical guests or videos in a cutting-edge audio and video experience.
With a limited operating history, investors are unsure as to Sphere’s success. However, with revenues of over $1 billion in the past 12 months, Sphere is off to a strong start. And shares trade at about 8 times earnings today.
Action to take: With the stock trending higher and continued strong bookings, Sphere could continue to grow as a unique destination worth repeat visits. That could increase the value of the property substantially in the years ahead.
Growth and momentum investors may like shares here, given their push higher. Currently, Sphere Entertainment does not pay a dividend.
For traders, the September $45 calls, last trading for about $1.70, could see mid-double-digit returns from a push higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.