Research Notes: Enormous Red Flags

Ashford Hospitality Trust can't be a buy... can it?

Highlights:

• On paper, AHT seems one of the most undervalued names in the market.

• Excessive leverage is not nearly as dangerous as a first glance suggests, and the business is recovering.

• Yet management has shown little interest in shareholder value — one reason why the stock is down a stunning 99.6% over the past five years.

• Huge optionality exists — but incentives get in the way.