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Tag: AMZN

JCPenney Affecting Mall REITS

JcPenney (JCP) had a huge drop this morning in stock price over 17% as of right now.  This was due to declines in profit and same-store sales.  Of course, this is having a huge affect on Mall REITs including one that we current invest in Washington Prime Group (WPG).

Washington Prime Group has a very small percentage of rent that comes from JcPenney. This amounts to less than 2% of the rent.  Again, Sears (SHLD) also is a renter of this mall reit but also accounts for less than 2% and most likely without further due diligence I believe sears is only accounting for 1% of the annual base rent that WPG receives on an annual basis.

For someone that has some retirement funds setup, this is a great time to get into Washington Prime Group and collect a massive dividend at over 10%.

For the fundamental trader, this is a great mall reit that should pay off handsomely in dividends and appreciation as there isn’t much more downside to mall reits.  We all know that Amazon (AMZN) wants in the retail space and purchased Whole Foods for billions of dollars.

For the technical trader, there is a bearish cross which means there is further downside.  I’m not too sure about this but it did break the support at $8.50 today so it is possible to get a better price by waiting it out.

Dividend Stock with over 10% Interest

Washington Prime Group (WPG) was once a dividend darling at 12% dividend.  It still sports a high dividend but that is expected to become lower as the price of the stock continues to appreciate.  This stock is an REIT that was hit hard when Macy’s couldn’t hit quarterly numbers including the numerous other mall stores that missed target as well.  These bad earning reports included store closures that affected REITs.  In May, Washington Prime Group hit an stock low below $7.50 which would have given you a nice 13% dividend.

Since May, this stock has had a steady appreciation with it recently going over $9.  Washington Prime Group is a unique REIT that caters to smaller retail plazas that are mostly in outdoor settings.  The Fairholme Fund run by billionaire Bruce Berkowitz invested millions in WPG recently.

For someone that has an IRA, 401k, and another tax-deferred stock account, this stock makes for a nice play.  As much as Amazon has taken so much market share in the retail space, Amazon (AMZN) has also proven that they need to be in brick-and-mortar when they announced that they are purchasing Whole Foods Market (WFM) for $13 billion.

There are other REITS in the similar mall industry that should continue to grow as the fallout disappears and investors see the true value of these mall REITs.  This stock should be a part of an investors’ portfolio for long-term growth in dividend and appreciation.

I plan to purchase shares in any dips in price but I do not own any at this time.

Double Your Return in One Month with Rite-AID!

The Rite-Aid – Walgreens merger saga is coming to an end after two years of merger approval issues.  The end result will be $6.50-$7.00 of cash out per each Rite-AID (RAD) share.  I believe it will end up being at $6.50.  The stock is trading currently at $3.83 which means you will double your money on closing.  The only thing that can hold this up is if FTC blocks the merger.  With Amazon coming to the retail pharmaceutical business, I do not see an argument that FTC can make to block the merger.

The FTC would be doing a disservice to prevent this merger.  Amazon already has a hold of the retail market.  It wouldn’t be tough for them to change their structure to take over the pharmacy business as well.  Amazon can easily make a subscription model to customers that need antibiotics, cough syrups, medicines, etc. without going to your local CVS, Walgreens, Fred, Rite-AID, etc.  that would be cheaper and require less employees.

If you like to gamble, feel free to pick up some Rite-AID (RAD) shares.  The company is also coming out with earnings on Thursday so there is a lot of public news that will be out this week and next week.  The price was recently at $4 a share but has gone down to $3.81 this morning making this a good purchase.  If at worse case they do not merge, Rite-Aid will definitely go down to $2 per share which would still be a nice buy for a company that other competitors are interested in purchasing.

Disclosure: Long RAD stock and Long with RAD naked puts

Walmart Finally Making Traction

When I go to Walmart (WMT), I always see long lines of people buying tons of stuff in a huge warehouse that contains goods for eating, playing, working, and everything that you need to do whatever you want and need. It is one of the only warehouse where their are crowds of people that are coming in and out of a store. It sometimes is annoying to have to stop and go for the crowd of people because any Walmart is always so crowded with shoppers.

Also living nearby their distribution center for Walmart.com, I know that they are taking great strides to play in the internet market. They know that internet distribution is key but they also have the volume and revenue to play in a space only reserved for Amazon.com. The great thing about brick and mortar stores that have an online presence is they can offer you the option to not only order and deliver to your house but the more quick option would be the pick-up at their stores where you can get in two hours.

Remember, that they also have the Sam’s Club brand which competes with the fiercely competitive Costco warehouse stores.  In February 2016, they started accepting Visa which means they allow all major credit cards which also include American Express, Discover, and Mastercard.  This will allow a huge network of consumers to shop in their stores and it should mean more growth for the company overall.

Employee morale is higher with proper hourly wages.  They have gotten rid of the strange welcome people in their stores and replaced them with security to check the consumers purchased items before exiting the store.  I feel that they are making all the necessary steps to perform at a much more competitive market.  They recently had a beat in their quarterly earnings and I expect this to continue in the future.  With a PE that is less than 15, there is really not much downside in the stock.  It has already seen the worse and it will continue to improve going forward.