market folly

We're posting up notes from the Invest For Kids Chicago Conference 2017.  Next up is Seth Singerman of Singerman Real Estate who pitched a long of Washington Prime Group (WPG).


Seth Singerman's Invest For Kids Chicago Presentation: Long Washington Prime Group

“Retail Apocalypse” has arrived.  The $100 billion increase in Amazon’s market cap since January is greater than the combined value of all REIT market caps.

Washington Prime Group (WPG) has a 12% dividend yield that is well covered, a 15% FCF yield, and trades < 7x earnings at a 10% cap rate.  30% upside if sentiment improves.  Only four analysts cover WPG.

Trades like a B-mall company but most of WPG’s value is better than B. CEO of Simon owns $250 mm of WPG stock.  WPG trades below the valuations of its own retail tenants.

Valuation: $10 base case, $7 down, $11.75 up over 3-4 years.  Rouse is a good comp; CBL is not a good comp.  WPG has low debt/EBITDA and no maturities over the next five years.



For more from this event, check out the rest of the presentations from Invest For Kids Chicago 2017.