Kimco Realty (KIM: $18.00)
May 17, 2017
Kimco Realty is an industry-leading real estate investment trust specializing in outdoor shopping centers and strip malls. The company has 710 shopping centers in its portfolio in 39 states, making it one of the most geographically diversified retail landlords in America. The company has top-tier tenants, including large firms and recognizable brands like Whole Foods, Trader Joe’s, The Gap, and Darden Restaurants (Olive Garden, etc.)
BUT, the stock is going down and down. We added the stock in March 2016 at $27, set a Sell Price of $24 and have stuck with the stock as it has dropped from $25 in January, $24 in February, $23 in March, $23 in April and now $18 in May. Obviously, we should have stayed with our Sell Price.
The problem is not the company – it is doing well. It is the perception of a weak Retail environment that Wall Street sees now. The PERCEPTION is sweeping the Street - that Retail as we know it is ending. Many are selling first and talking later. Warren Buffett was quoted last week saying similar things. We know this not to be true, but perception rules the Street many times. It includes most if not all stocks that are associated with Retail. Did you see the chart in this week’s newsletter that we included about store closings? We reprint it for you here:
Source: Business Insider
That’s the whole story right here in this chart.
The dividend of $1.08 giving new investors a 5.7% yield is secure through earnings and cash flow but that is not enough to hold up the stock.
With great regret, we hereby remove the stock from our REIT portfolio.