Ashford Hospitality Trust Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Seems like everything is up today, but Ashford Hospitality Trust (NYS: AHT) is up more than most -- 12% and counting. Yowza.

So what: Twice in the past week, this hotel REIT has plummeted far enough to trigger our "10% promise" to tell you what the heck's going on. Last week, the reason was "earnings." Last night, as fellow Fool Anders Bylund opined, it seems a delayed reaction to a couple analyst downgrades of Summit Hotels (NYS: INN) sparked Ashford's sell-off.

Now what: This morning, it would appear investors woke up and realized -- hey, Summit Hotels is anentirely different hotel stock from Ashford. And just because some analyst says Summit is a bad bet, it doesn't mean you necessarily have to sell Ashford, too. So they began buying it back.

I can't shake the feeling that somehow, lemmings have gotten hold of E*TRADE accounts, and are rushing back and forth, into and out of the hotel REITs. My advice, then is simple: Unless you're a lemming yourself, stay away from Ashford. The company reported miserable earnings last week. It's got no P/E to speak of, and it's simply not worth your time today.

Want to learn more about Ashford Hospitality Trust?Add it to your Fool Watchlist.

At the time this article was published Fool contributorRich Smithdoes not own (or short) shares of any company named above. The Motley Fool has adisclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story