Author Topic: What are you buying today?  (Read 1128753 times)

frommi

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Re: What are you buying today?
« Reply #2780 on: February 21, 2018, 12:11:30 AM »
Not sure how SKT fits as a Graham stock.  Quality does matter as it affects liquidation value.  I see too many outlet malls as losing value by the day. Less consumer appeal. Lower quality leases.  Too much debt.

Tanger guided for flat NOI/AFFO for 2018, that is enough for me to conclude that the value is stable. Your opinion is the consensus and the reason i can buy at a discount.
*EDIT* It is maybe not in the original "Graham" sense (Price to book) to buy REIT`s below NAV, but why not? Since real estate is at least as liquid as inventory and has a private market with a private market price i see no reason not to. With a large enough margin of safety this should work equally good. And if the company sells assets and buys its own stock it widens this margin further.
« Last Edit: February 21, 2018, 03:26:30 AM by frommi »


Spekulatius

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Re: What are you buying today?
« Reply #2781 on: February 21, 2018, 04:03:57 AM »
Not sure how SKT fits as a Graham stock.  Quality does matter as it affects liquidation value.  I see too many outlet malls as losing value by the day. Less consumer appeal. Lower quality leases.  Too much debt.

Tanger guided for flat NOI/AFFO for 2018, that is enough for me to conclude that the value is stable. Your opinion is the consensus and the reason i can buy at a discount.
*EDIT* It is maybe not in the original "Graham" sense (Price to book) to buy REIT`s below NAV, but why not? Since real estate is at least as liquid as inventory and has a private market with a private market price i see no reason not to. With a large enough margin of safety this should work equally good. And if the company sells assets and buys its own stock it widens this margin further.

NOI trends have been down and they had to keep their occupancy up by getting into a bunch of short term leases. This is not an indication of strength. If you look at liquidation value, I think KIM and SRG (which you also own, I think) are better plays and they also have better NOI trends.

The outlet malls tenants compete price and choice and price sensitive customers tend to go more and more online for bargains. Their outlets are very heavily into clothing, which helps regarding to online competition, but also gets less wallet share over time.

I think KIM and SRG have better opportunities to develop their existing retail for high returns nd trade equally cheap.

I have decided to exit this sector except a LT microcap holding, because I believe these are mostly melting ice cube cases.
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writser

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Re: What are you buying today?
« Reply #2782 on: February 21, 2018, 04:15:28 AM »
If you have a 30% allocation to retail REITís, would you call that a Graham type portfolio or a concentrated sector bet? I think it is an easy trap to fall into to convince yourself you are doing the first while actually doing the second. Not implying you do so :)
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frommi

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Re: What are you buying today?
« Reply #2783 on: February 21, 2018, 04:57:05 AM »
If you have a 30% allocation to retail REITís, would you call that a Graham type portfolio or a concentrated sector bet? I think it is an easy trap to fall into to convince yourself you are doing the first while actually doing the second. Not implying you do so :)

Maybe you are right, but thinking about it, isn`t it possible that this is both at the same time? :)

frommi

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Re: What are you buying today?
« Reply #2784 on: February 21, 2018, 05:01:48 AM »
NOI trends have been down and they had to keep their occupancy up by getting into a bunch of short term leases. This is not an indication of strength. If you look at liquidation value, I think KIM and SRG (which you also own, I think) are better plays and they also have better NOI trends.

The outlet malls tenants compete price and choice and price sensitive customers tend to go more and more online for bargains. Their outlets are very heavily into clothing, which helps regarding to online competition, but also gets less wallet share over time.

I think KIM and SRG have better opportunities to develop their existing retail for high returns nd trade equally cheap.

I have decided to exit this sector except a LT microcap holding, because I believe these are mostly melting ice cube cases.

Thanks. I will look into KIM, it looks like i was too lazy to do that until now. I have nothing against melting ice cubes, i learned with netnets that these are sometimes the best investments.
*EDIT* If i have the numbers correct than KIM trades just at a discount of 30% to NAV if i use the same caprate as for SKT and KIM has a higher debt/NOI ratio. SKT and SRC have to go up by 50% to reach fair value/NAV. Btw. my position sizing is 16% SRG, 10% SRC and 4% SKT, so i wouldn`t see SKT as my absolute favorite.
« Last Edit: February 21, 2018, 05:16:36 AM by frommi »

scorpioncapital

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Re: What are you buying today?
« Reply #2785 on: February 21, 2018, 05:27:43 AM »
I think retail is a tough business - and strangely enough , I even see softness in e-commerce retail. ALL retail, including e-commerce, seems to suffer from the same defects, namely very commoditized markets with just massive inventory and no distinctions. There's no loyalty online, offline, there is almost nowhere to hide.

frommi

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Re: What are you buying today?
« Reply #2786 on: February 21, 2018, 06:04:52 AM »
I think retail is a tough business - and strangely enough , I even see softness in e-commerce retail. ALL retail, including e-commerce, seems to suffer from the same defects, namely very commoditized markets with just massive inventory and no distinctions. There's no loyalty online, offline, there is almost nowhere to hide.

I see it the same, but i also think that retail real estate is a different animal. If in doubt they can redevelop the properties to other uses. Look what SRG is doing with the old Sears boxes, at least if they own good locations. And i can`t imagine a world where everybody sits at home ordering stuff without going out. That will probably never happen.

CorpRaider

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Re: What are you buying today?
« Reply #2787 on: February 21, 2018, 06:26:11 AM »
Yeah, get me some mobility as a service, so I don't have to park and get me some RFID automatic checkout so I don't have to wait in line to give you money to pay for my items and I could see it actually being pleasurable to shop/taking back share from online.

zippy1

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Re: What are you buying today?
« Reply #2788 on: February 21, 2018, 06:58:08 AM »
Yeah, get me some mobility as a service, so I don't have to park and get me some RFID automatic checkout so I don't have to wait in line to give you money to pay for my items and I could see it actually being pleasurable to shop/taking back share from online.
My understanding is that many traditional Asian department stores are dying and new malls are built as places for having fun/spending time/hanging out with friends instead of just purely "shopping."  These malls seem to do rather well....

BPCAP

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Re: What are you buying today?
« Reply #2789 on: February 21, 2018, 08:45:35 AM »
Asian malls are typically in dense cities, thus they have optionality (they are also loved for the air conditioning).  Mall outlet malls are often on cheap land you have to drive far to get to.