Simon Property Story

Simon Property Group Inc -- USA Stock  

USD 155.43  1.70  1.08%

Macroaxis News
By Nathan Young

Simon Property Group is a company that purchases real estate, most notably retail real estate including malls and shopping centers. Retail has been struggling these last several quarters and many fear it still could fall even lower. The biggest day in retail is rapidly approaching and it may be a time to monitor investments that are related to this category. The reason property is in focus in this article is with all of the stores going bankrupt, you want to ensure that the companies owning retail real estate are properly diversified and able to handle the slow down.

Fama & French Classification
Retail Real Estate Has Cooled off Creating Potential Buying Opportunities

Simon Property Group released their latest quarterly numbers in late October and net income was $513.8M compared to $504.7M in the prior year for the same period. This number contains income related to disposition and acquisition activity. Comparing the last nine months, net income has come in at $1.374B, compared to $1.441B in the prior year for the same period. Numbers have remained steady and as a real estate company, this is what investors want to see. It may be beneficial to wait for full year numbers as that will take into account the large sell off in the retail space.

David Simon, Chairman and CEO of Simon Property Group stated he was “very pleased” with quarterly results. Occupancy numbers were solid and leasing was sound as well, indicating their investments are doing well.  

There are two ways to place Simon Property Group and the first is a real estate play. For comparisons, you could venture into the REIT space. Real estate has done well over the last several years, but since this is specific to retail, it may move differently than traditional real estate. Secondly, you can play this as a retail investment considering it depends on companies occupying store space. This is why it may be more beneficial to wait for full year numbers to get a solid feel for the markets health.  

The stock has increased over the long term, but has since retraced a bit due to the slowing retail market. Now would be a good time for due diligence because price may be at a discount compared against current market conditions. One aspect that you may note as well is Simon Property Group invests in higher end malls, which can help with the stability of the company.  

For those who are uninvested at this point, I highly recommend completing your due diligence and seeing if this is a sound investment. Read the reports and get a feel for what management is saying and feeling for the future. Simon Property Group is a very flexible investment given their business plan, but make sure you are not overly invested by having this company and other retail companies in your portfolio.

Story Momentum

This article from Macroaxis published on 20 of November contributed to the next trading period price escalation.The trading price change to the next next day price was 0.09% . The trading price change when the story was published to current price is 1.07% .

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Beta Comparative Analysis
      Simon Property Comparables 
Simon Property is currently under evaluation in beta category among related companies. Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of financial instrument to the financial market in which this instrument is traded. For example if Beta of equity is 2, it will be expected to significantly outperform market when market is going up and significantly underperform when market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns during over time.