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Author: 1000 Big funky green star, 20000 posts Top Recommended Fools Feste Award Nominee! Coverage Fool Supernova Phoenix 1
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Subject: An interesting REIT SKT Date: 6/13/2003 9:36 PM
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Hi present and future investors in SKT,

The board was discussing REITs. Well here is one I am excited about. If the stock market continues to go up, this one like most REITs is likely to go down. I will explain later in the post. What is a good buy price for this REIT? I am still considering this question.

SKT Tangar Factory Outlet;

Here is some prelimary research on the company. The news articles show good FFO growth which is rare among REITs and a very good dividend yield. Debt appears managable though a bit high. Finding a good buy price is the problem.

Beth (tomandbeth) a TMF seminar student, brought this one to my attention. Though, I am not a big fan of REITs this one looks better than most. I do think there are times when REITs make super investments. SKI have given investors some super opportunities to get them cheap when the Nasdaq and S&P 500 was soaring. This one is going on my list for potential future investments.


Unfortunately, Tangar Factory Outlets (SKT) is not updated in Value Line, yet. However, I have visited many of their locations and my wife loves the outlet stores they are invested in at Pigeon Forge and Sieverville, and off I-65 going to headed from Louisville to Tennessee. The factory outlet stores, they invest in are fun stores and usually very crowded.

Presently SKT operates 34 Tanger Outlet Centers, located in 21 states, totaling approximately 6.2 million square feet leased to over 1,300 stores operated by over 300 different brand name companies. As of March 31, 2003, Tanger's existing centers were 95% occupied. For more information on Tanger Outlet Centers, visit our web site at www.tangeroutlet.com.

Here is information that might be useful to you as you research the company.

Great dividend 7.3%. Just about right for REITs more than average and yet not so high that it is unsustainable. I am comfortable with this.

http://boards.fool.com/Messages.asp?bid=108884

TMF article showing Warren Buffett dabbling in REITs including Tangar (SKT)
http://www.fool.com/research/2001/foolsden010109.htm

Warren Buffet reduces stake in SKT form 5.3% to 4.93%
http://quote.fool.com/news/symbolnews.asp?guid={6DDC2E43-6A1F-4FEB-9445-B23DBD126DA9}&currticker=skt&symbols=skt&nx=&bx=

The REIT industry-
This will give you a REIT investor secret. When the stock market goes up, investors tend to sell REITs. The thinking is why settle for 7% dividend and marginal growth when I can make 12% plus in the general equity markets. For REIT investors, they should be thinking investors are selling my favorite REITs that will provide me a buying opportunity that will not only increase my effective yield but give me good appreciation potential when the general stock market sells off. Here is an excellent example of two asset classes that tend to move in opposite directions. A good diversification idea.

http://quote.fool.com/news/symbolnews.asp?guid={B65F2F7C-DC4B-4A35-B1D3-A90952BFECCD}&currticker=skt&symbols=skt&nx=&bx=

Notice this chart when the stock market was soaring SKT was diving.

http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=skt&time=&freq=

It is not a perfect divergence, but it certainly shows the potential when compared to the S&P 500. During the heydays of 1999 – 2001, the S&P 500 soared while SKT dived. Who was buying SKT in 2001? Warren Buffett. He certainly understands proper diversification.

http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=skt&time=&freq=

In this latest quarterly report – pay special attention to those bullet points. Look back on earlier quarterly and annual earnings reports. Each will have those bullet points and these list some of the most important things to look for when investing in Reits and they are also what are mostly listed in news about the company. This should form the basis of your SKT and Reit research.

http://quote.fool.com/news/symbolnews.asp?guid={B058CB23-6FB0-40A2-85B5-4BC25A0D4474}&currticker=skt&symbols=skt&nx=&bx=

This is always good news
http://quote.fool.com/news/symbolnews.asp?guid={EF970F9D-9BC3-492B-93EF-B95C2E920196}&currticker=skt&symbols=skt&nx=37743.3506944444-804206711&bx=

SKT increases FFO (funds from operations) 5.3%. This is great for a REIT.
http://quote.fool.com/news/symbolnews.asp?guid={D6C75351-EECD-4E65-B323-6A2C1BC8FE93}&currticker=skt&symbols=skt&nx=37743.3506944444-804206711&bx=

They are expanding
http://quote.fool.com/news/symbolnews.asp?guid={E2BA64EB-5549-41D1-BEB0-C1ED46A4FD35}&currticker=skt&symbols=skt&nx=37641.5611111111-801981938&bx=

This is truly amazing – older news but this REIT has done very well.
http://quote.fool.com/news/symbolnews.asp?guid={8209C39C-63BF-453D-AAD1-F18C59A47125}&currticker=skt&symbols=skt&nx=37641.5611111111-801981938&bx=

The real research comes by reading all the SEC filings especially the 10K and 10Q.

http://quote.fool.com/sec/sec.asp?currticker=skt&symbols=skt

Fool articles on REITS
http://www.fool.com/foolu/askfoolu/2003/askfoolu030528.htm

I like this REIT and will be watching it.

I will continue to research this company.


Any thoughts?

tom

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