....according to Brad Thomas, that is:https://seekingalpha.com/article/4254067-7-best-reits-can-bu...Cheers!MurphBL and MFPP Home Fool
Thanks Murph,This is good and I'm saving it to re-read (before it goes to the paywall). There are some new-to-me REIT's here. FIrst reaction to one: Summit...1st thing to dive in a downturn is travel.The ones I know and have...I am happy with KIM (2.3% allocation)- started buying when it started popping up at $20 in Aug 17, i.e. too early, but got basis down to $19.50 or so through covered calls. I kept buying through 2018 (not believing in the death of brick & mortar) down to the $14's; but admit to selling my shares in a high yield bond fund to do it.** Now at $16.70, I'm feeling a margin of safety. See ** below.I am troubled by SKT. I think the management is smart, focused, and cares. But is the thesis that brands "need" the outlets broken? In my area (Erie), will people drive 40 miles to the non-Tanger outlet when the mall and TJX stores are 10-20 miles? Where I spent the last part of my career (Pittsburgh) there is a Tanger that's closer and in the "right" growing, wealthy, one-county-out suburb. I think it gets traffic but don't know. I still travel 25% for biz and know there are two Tangers in Columbus, OH. One that was placed 55 miles south - maybe it captures some Xenia traffic but lately it's been sleepy in the parking lot there as I drive past. This August (start of school shopping) they had an event: a band and amusement rides. This is what management was saying about helping the tenants with marketing spend. Note this was also Ohio tax-free shopping weekend (7-Aug). Even so the distance is tough, IMO. This seems to be changing, however, as Columbus's growth to the south is seen by newly widened roads and improved I-71 exits. The southern growing neighborhoods of Grove City area cut the distance in half. The northern Tanger outlet is "one county out" but only about 30 miles from downtown. Ohio announced a new I-71 interchange right there just this March. See here:https://www.bizjournals.com/columbus/news/2019/03/11/exclusi...So I'm thinking there's a method that management is using to bring these stores closer to customers (bigger population centers) like the new Nashville announced last Fall. And the closing of 4 units that are in not so populated areas. See updated announcement 1-Apr here:http://investors.tangeroutlet.com/file/Index?KeyFile=3973272... Anyway I'm not feeling so safe with a $22.25 cost basis. I have a 1.4% allocation so I think there's room. So, through written June puts, I'll lessen cost of current shares or be put new shares that will effect a $21.-21.25 basis either way. So, if Brad's no valuation change scenario comes to fruition, I'll be good with that (somewhat safe) and a decent total return.I think this is a BIG if for SKT: ...about 48% undervalued if management succeeds in turnaround and restores to historical growth. And now for the **...in terms of what mix of stocks/bonds/cash is incredibly important because NO DIVIDEND STOCK IS A TRUE BOND ALTERNATIVE. ...GUILTY but don't see the value in bonds right now. I do, however, have a 3 year cash cushion out of the market. Many of you REIT board regulars know all about investing better than me. I muse to perhaps educate a newbie or two about not giving up when you buy at too high a price or something you believe in tanks or flattens out....keep reading; researching; keep records; understand when the thesis still stands and when it breaks. JoeCommunity Fool
..Anyway I'm not feeling so safe with a $22.25 cost basis. I have a 1.4% allocation so I think there's room. So, through written June puts, I'll lessen cost of current shares or be put new shares that will effect a $21.-21.25 basis either way. So, if Brad's no valuation change scenario comes to fruition, I'll be good with that (somewhat safe) and a decent total return.I think this is a BIG if for SKT: ...about 48% undervalued if management succeeds in turnaround and restores to historical growth.... Hi Joe!I feel your pain on SKT; down almost 18% on a $24.30 cost basis (not including dividends received the past 2 years, which does take the edge off a bit).The "good" news is that my position size is about half yours (0.8% versus your 1.4%). However, after a lot of reading, thinking and extrapolating, I have decided to hold what I have, and DRIP the dividends. What keeps me in the SKT game is the financial conservatism (and experience) of management, and the relatively higher-than-normal-for-a-REIT safety factor in the form of a lower % payout (albeit rising). I like that they are not afraid to prune/sell lower performers and will use the proceeds to pay off debt.Bottom line, I will continue to hold/drip unless things worsen dramatically for SKT.....and only add via cash-secured puts that are significantly "overpriced". Cheers!MurphBL and MFPP Home Fool
Here are my one line thoughts on the names...MAC - I am ambivalent because MallsBPR - debt is risky and not acceptableINN - Need to look deeper;KRG - I recently posted on this; Expect lower FFO due to asset dis-positioning and stock price may experience volatility and I am not seeing the stock price moving up until 2020, where they can start growing againBRX - I like this stock, but not adding here; having full positionKIM - I have small position here, thinking of swapping it to BRX, so that I don't have to follow two companies!SKT - I think the systemic risk is lot higher for this concept
So.... you didn’t really like any? What would you buy today instead?Just to be fair and not ask a question I wouldn’t answer, I would buy STWD or HASI, or actually I would buy two that are high dividend but not REIT, TFSL and another I can’t name because I added today.... give me a couple days....😌Randy. Owner of all stocks named here...
Randy,I have a big chunk of TFSL, Will be waiting to hear what you just added. Dsvid
What would you buy today instead?Nothing is interesting to me on REIT and December is still fresh in memory so price anchoring is annoying. However, I added some Zayo June $30 calls (when the stock was below $30) and sold some Apr $32.5 calls which expired today and rolled it to May $32.5 calls, effectively my cost is -$0.5, that is I have already took my capital and $0.5, so either I make $2.5 per call or I should be happy about my $0.5. Likewise, I went long Berkshire and short WFC and closed that trade post WFC earnings for near 100% profit. Same on Citi calls post earnings, closed today for 100% gains.Recently added DIS before the break-out and FDX same and added some more HD, all are up 15%, which is good. Waiting for the weakness on healthcare names to run the course and thinking of adding XLV and some pharma names (these will be trading positions and not long term names).Options are like 0.5% and stocks are 2% positions. Also, closed TFSL, I think there are some risk around their deposit side and the name is not going to de-mutualize any time soon. In any case, I have lots of C, JPM and BRK for financials.
I recently added SRC to my portfolio after Morningstar Dividend Investor did likewise. Also, another Reitster, Rida Morwa, over at Seeking Alpha recently made the bull case for SRC here:https://seekingalpha.com/article/4253365-spirit-realty-6_2-p...Morningstar DI recently sold all of its shares of O based on its valuation (it's overvalued at 22x its 2019 estimate of AFFO) and used a portion of the proceeds to buy shares in SRC, which it considers to be undervalued (at 12x its 2019 estimate of AFFO). Both Morningstar DI and Rida Morwa recognize that SRC has a lot to prove compared to O, but also see similarities in the quality of its net lease portfolio.DavidLong O and SRC
Thanks to all and good discussion. Kingran, i actually closed out a few diagonals that ran away from me over the last couple weeks. Some same names as you mentioned which i will have to wait to list. I am okay rolling diagonals that have climbed above my sold call but dont like to try to roll calls that i get very little premium for and tie up a bit of capital so i usually sell the whole thing at a good return and start over. But now i have opened up a bit of capital and need to decide how to deploy it. Market seems a little high though and may wait for compelling prices...Randy
Discussion of the leverage at BPR: https://seekingalpha.com/article/4254525-brookfield-property...
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