SPG $GGP WPG $KIM DDR $MAC CBL $REG WRI I believe in the Efficient Market Theory -- in the long run. By that I think that on any given day a stock is either over valued or under valued but eventually after all the various investor segments digest the total news about a company the price trend begins to trend in the direction of the stocks actual Revenue and Earnings.Right now I see several clues that tell me that Mall REITs may be over valued:
- Major retailers are announcing cutbacks in their expansion plans
- Major retailers are showing decreasing same store sales
- Major retailers keep announcing store closings
- The stock prices of major retailers are falling
- Hedge funds are beginning to increase their short interest in Mall REITs
The Mall REITs are dependent on the profitability of those major retailers to pay the rents.
Right now there is a disconnect between the share prices of major retailers and share prices of the mall owners. Common sense tells me that the prices of both sectors should eventually have a positive correlation.
Who are the major mall owners:
Simon Property Group (SPG), General Growth Properties (GGP), Washington Prime Group (WPG), Kimco Realty (KIM), Developers Diversified Realty (DDR), The Macerich Co. (MAC), CBL & Associates Properties (CBL), Regency Centers (REG) and Weingarten Realty Investors (WRI)
At this time I would choose one of these strategies depending on your risk profile:
- Not increase my holdings in any of these REITs
- If you own any of these you might want to calculate your exit point and put in stop losses
- Buy some puts on these stocks
- Short some of these stocks like the hedge funds