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Our High Yield REIT Portfolio Designed For Outperformance

Published Fri, 07 Jul 2017 08:43:09 -0400 on Seeking Alpha

Pundits say active management can’t outperform and passive ETFs are the way of the future. They say fees are too high and markets are too efficient such that any potential alpha is washed out by the cost of active management.
One year ago, we set out to prove everyone wrong.
2CHYP, or the 2nd Market Capital Corsaires High Yield Portfolio began trading on 7/1/16 with $100,000 and as of 6/30/17 is worth $115,766. That is a return of 15.76% compared to REITs coming in at -1.82% as measured by the RMS.
This is not a victory lap - one year could easily be a fluke. So, in our perpetual quest to prove the merits of active management, we intend to crush the market return again this year and every year until I get old and senile.
Alpha is more plentiful, both positive and negative
There is a simple inverse relationship between market efficiency and alpha generation potential. The more mispricing exists, the more an active manager can outperform or underperform. 2 concurrent phenomena have amplified the alpha potential in the market.
Lower active share Emergent groupthink Passive investment allows mispricing as it does not have a mechanism for adjusting for fundamentals. Thus, as the active share decreased over the past decades and to a greater degree in the past 3 years, there is a reduced correcting mechanism. When prices get out of whack, there is simply not enough active investment to return pricing to intrinsic value, even if the active managers correctly... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CBL & ASSOCIATES PROPERTIES 1.38   0.0 -0.95 0.35 27.34
WP GLIMCHER 4.18   24.6 0.17 1.00 24.10
CORECIVIC 18.06   12.0 1.51 1.76 9.83
WHITESTONE REIT 13.84   25.2 0.55 1.14 8.62
NEW SENIOR INVESTMENT GROUP 6.41   0.0 -1.56 0.52 8.39
KITE REALTY GROUP TRUST 15.92   0.0 -0.27 1.27 8.07
CITY OFFICE REIT 13.89   0.0 -0.39 0.94 6.92
OMEGA HEALTHCARE INVESTORS 41.16   32.4 1.27 2.64 6.57
CORENERGY INFRASTRUCTURE TRUST 45.81   18.6 2.47 3.00 6.44
GRAMERCY PROPERTY TRUST 27.49   38.2 0.72 1.50 5.46
MEDICAL PROPERTIES TRUST 18.94   7.3 2.61 1.04 5.30
BRANDYWINE REALTY TRUST 14.85   29.7 0.50 0.76 5.08
STAG INDUSTRIAL 29.50   47.6 0.62 1.43 4.93

CBL & ASSOCIATES PROPERTIES - CBL
CBL & ASSOCIATES PROPERTIES - CBL  


Older articles featuring Cbl & Associates Properties (CBL):
CBL Properties Establishes Regular Quarterly Common Stock Dividend
6 Reasons To Ditch High Yield REITs
Rents Paid, Dividends Raised: REIT Earnings Recap
REIT Earnings Halftime Report: Dividend Cuts, No More
PTY: Safest +9% Yield Cash Machine, Paid Monthly
Dividend Cuts And Overdue Rent: REIT Earnings Recap
Dividend Cuts And Overdue Rent: Previewing REIT Earnings Season
Retail REITs: Double-Digit Yields, Secular Shifts And Mean-Reversion
We Need To Talk About Dividend Cuts - They Are A Necessary Evil
REIT Preferreds: Higher-Yield Without Excess Risk

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