SAN DIEGO—Locally based Retail Opportunity Investments Corp. reported another solid quarter, led by 10.5% FFO/sh growth, 4.3% ss-NOI growth (despite a difficult +8% comp in 1Q13), and $112 million of YTD acquisitions. According to MLV & Co. analysts, management continues to source “attractive deals in core West Coast markets, including Portland, San Diego, Seattle, and Silicon Valley this year—in these highly competitive markets, deal acumen and relationships remain a key ROIC strength.”

With only 3.8 million warrants outstanding, the company’s capital structure is now stronger and simpler, says MLV & Co., which supports the firm’s buy rating and $18 price target.

Stuart A. Tanz, president and CEO of Retail Opportunity Investments Corp. stated in the earnings call that “We are off to a solid start in 2014. We are continuing to execute our business plan of broadening our portfolio through acquiring shopping centers in our core, West Coast markets, and enhancing value through our leasing and management initiatives.”

Year-to-date, Tanz explains, “we have secured $112.1 million of shopping center acquisitions. Additionally, for the ninth consecutive quarter, we posted solid growth in same-center net operating income.”

In addition, “we also executed a record number of leases and achieved solid growth in same-space comparative rents,” he said. “With our accomplishments thus far in 2014, together with our acquisition pipeline activity and leasing momentum, we are on track with achieving our growth objectives for the year.”

According to MLV & Co., the team’s $18 price target “reflects a 5% premium to our 4 Q14 NAV per share estimate, which in turn applies a 5.50% cap rate to forward NOI. We believe consensus NAV per share estimates are overly conservative, underappreciating cap rate compression along the West Coast and focusing more on ROIC’s somewhat higher acquisition yields—which in our view are evidence of the company’s deal acumen more than reflective of 6%+ cap rate pricing in core coastal markets. Including the stock’s 4.1% dividend yield, our price target implies a 12-month total return potential of 18%.

Takeaways from the quarter, according to MLV & Co. analysts include:

*Operating metrics help drive double-digit earnings growth.

*Acquisition pace maintains momentum, with $112M YTD.

*Balance sheet keeps improving.

ROIC specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers, anchored by national or regional supermarkets and drugstores. As of March 31, 2014, ROIC owned 56 shopping centers encompassing approximately 6 million square feet.