Simon Property Group: An Optimistic Look Towards American Consumerism

Value investing during this extremely trying time can be a trap. Technicals and fundamentals scream buy! What comes down must go up in time. All we, as value investors, must do is sit and wait for the companies to rise again. The trap however is right underneath the storm. Macroeconomic data from unemployment to GDP changes are reaching all time levels. Q1 statements are posting showing the beginning of a monstrous cliff. While trailing twelve month earnings are strong the forward earnings are looking bleaker. How deep can this economic stoppage hit? Let’s take a dive, from the technical and fundamental perspective, at Simon Property Group Inc (SPG) that is at the heart of American consumerism.

Simon Property Group Inc is a Real Estate Investment Trust aimed at owning and managing mall properties across the United States and abroad in select locations. It’s portfolio includes 85 properties nation wide and 35 internationally with a focus in the EU and Japan. I can count no less than a dozen SPG malls throughout the US and Japan that I have visited. Their features and design of the malls continue to be visually appealing and draw large crowds at each of the properties I’ve attended. It is because of the continual visitation to these properties that drew me into researching the company.

Simon Property Group Inc Stock Performance

Let’s begin with their chart. Simon Property Group Inc is currently priced at $52.46 with a high of $180 and low of $42. 90 day chart shows the massive sell off. From $139 on Feb 21 to $44 on Mar 18 representing a 68% drop in value. Along the fall and continued slump through Apr 22 the 20, 50, and 100 day moving averages have fallen. Expect the 100 day to accelerate downwards as April and May progress. Between Mar 18 and Apr 22 SPG has been trading within a $20 window consolidating while briefly eclipsing its 10 day moving Average. The MACD still remains negative at -7.69 and well off it’s low of -22.48. A very upbeat note is the divergence has stayed in positive territory since the beginning of the month. Conclusion: A chartist would not be purchasing this stock yet. Too much consolidation is still occuring and until a breakout occurs with the MACD or SMA’s buyers are waiting on the sideline.

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