Summary
- Although I consider REITs more “buy and hold” driven, it’s important to rebalance portfolios to take advantage of opportunistic mispricing, or, get rid of a few ugly ducklings.
- "Department stores across the country account for more than 350 million square feet of mall space." Lauren Thomas.
- Tanger has no department store exposure, access to capital is still a critical differentiator.
- The selloff (valuation) is unwarranted as Tanger’s business model is perfectly suited for the new paradigm in which “department stores are under attack.
- This idea was discussed in more depth with members of my private investing community, Rhino Real Estate Advisors. Get started today »
In case you missed it, I recently wrote an article summarizing my 2018 Top SWAN (stands for “sleep well at night”) picks - and the weighted average total return for the basket of REITs (through November 2018) is 10.6%. And in this article today, I will be making a strong case for why I still stand behind Tanger Outlets (SKT).
It’s interesting to revisit this list of high conviction picks to assess the year-end results. As you can imagine, I’m very pleased with these picks, especially home runs like Omega Healthcare (OHI) +46.6% YTD and Store Capital (STOR) +19.6% YTD.
Although I consider REITs more “buy and hold” driven, it’s important to rebalance portfolios to take advantage of opportunistic mispricing, or, get rid of a few ugly ducklings.
Because of selective vetting, it’s rare that I would unload a SWAN, because, as a value investor, I am disciplined in my approach of surveying the list of opportunities. This typically involves considering the company’s history, its moat-worth attributes, and most importantly, how the company is able to maintain its long-term pricing power.
And I’m not surprised to see this collective basket of SWANs out-perform (+10.6% YTD), given the in-depth, almost microscopic, research that we undertake. (i.e. our portfolios returned around 5% on average).
Continue reading on SeekingAlpha.