Due to drop of about 20% in the share price of REIT firm UDR, Inc. (UDR), over the past six months, Zacks infrastructure analyst Greg Sukenik recommends a Buy rating on the shares of the company.  The following excerpts explain his position:

'Operationally, UDR had strong 2nd quarter, with solid increases in revenue, net operating income (NOI) and income per occupied home. While occupancies slightly declined, rental rates are increasing at a healthy pace. Second quarter funds from operations (FFO) missed our estimate by $0.02 per share. The stock has dropped some 30% over the past six months due to a sector-wide sell-off.

'Backed by solid fundamentals and what we expect will be another good year for apartment real estate investment trusts (REITs), UDR's valuation remains attractive compared to its peers. At 12.8x 2007 FFO estimates, UDR still trades at a discount to its peer group; a 30% discount to the weighted average multiple of multi-family REITs in our coverage universe.

'Due to a general sell-off in the sector, shares of UDR have dropped about 20% over the past six months. The company has assets located in many secondary and lower barrier markets, which do not have the potential for long-term consistent growth although UDR continues to post same-store revenue and NOI results in line with its peers.

'In addition, the company is a skilled redeveloper, which increases the earnings profile of older properties. As we expect 2007 to be another good year for apartments, UDR should continue to realize solid same-store operating results. We are estimating 10%+ FFO growth in 2007. As a value play, UDR is a good stock to acquire for its relatively attractive dividend yield, now 5.6% after the latest increase, and discounted valuation. We are keeping our price target at 15.0x 2007 FFO estimates or $28.00 per share.'