Published Mon, 31 Dec 2018 17:26:33 -0500 on Seeking Alpha
This research report was produced by The REIT Forum with assistance from Big Dog Investments.
The market went crazy and we have some buying opportunities.
We will be going over some preferred shares to sell and 2 REITs worth buying right now.
The market shifts
In December, the fundamental valuations completely broke down for preferred shares. We witnessed massive failures in market pricing. The deviations in prices are absurd, which is the best possible scenario for entering new positions.
The market became terrified of a recession. It looks like early 2016 or early 2018. Stock values are down, economic indicators are down, but they are telling us things we should've already known. The economy is still performing well. Unemployment is still low. However, the prospect of slower growth is terrifying Wall Street.
To account for the price swings and finding relative values, we've modified our price targets in two ways. We reduced targets based on the risk rating. Higher risk shares saw a larger reduction. We also put in a small reduction on preferred shares that are FTF (fixed-to-floating).
Treasury yields were falling and the curve is quite flat. That means investors will begin speculating over whether they actually need the protection offered by the FTF feature. We still see it as valuable but are reducing the premium we're willing to pay for shares that carry it. The reduction is only about $.10.
We are also going to call out a few... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|TWO HARBORS INVESTMENT||13.95||4.2||3.29||1.88||13.51|
|CBL & ASSOCIATES PROPERTIES||2.21||0.0||-0.18||0.30||13.45|
|PENNSYLVANIA REAL ESTATE INVESTMENT TRUST||6.70||0.0||-0.82||0.84||12.21|
|ANNALY CAPITAL MANAGEMENT||10.09||4.0||2.52||1.20||12.07|
|TANGER FACTORY OUTLET CENTERS||21.81||38.3||0.57||1.40||6.36|
|SIMON PROPERTY GROUP||171.23||23.1||7.41||8.00||4.64|
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