Has The Worst Mall REIT In 2017 Finally Hit Bottom?

Founded in 1960 as Pennsylvania Real Estate Investment Trust, the company merged with the Rubin Organization in 1997. In 2003, the company changed its strategic focus from a diversified model into a retail-focused platform and renamed the company PREIT.

Summary

A short squeeze is generally triggered by a positive development that suggests the stock may be embarking on a reversal.

The Mall REIT that has seen the widest pullback year-to-date is PREIT.

Shares have over-corrected and I believe there is an opportunity for new money to achieve above average returns, possibly 40% annualized.

Perhaps it was a short squeeze yesterday that sparked most of the beaten down Mall REIT shares to climb. Shares in Tanger Factory Outlets (SKT), CBL Properties (CBL), Washington Prime (WPG), and PREIT (PEI) all ramped up, signaling a turnaround could be around the corner.

Perfect timing, since I’m also working on the upcoming edition of my newsletter, The Forbes Real Estate Investor. I’m on a mission to select the two “best buys” in the retail sector, the stalwart dividend growers that are now trading at a wide margin of safety.

A short squeeze is generally triggered by a positive development that suggests the stock may be embarking on a reversal. I’m certain the shorts are feeling weak hands since most of the Mall REIT (short) sellers are responsible for compensating the high dividend payments. I would certainly not want to be a hedge fund shorting shares in quality REITs like Tanger.

The Mall REIT that has seen the widest pullback year-to-date is PREIT. As evidenced by the chart below, PEI has returned -44.7% year-to-date:

I have written several articles on PEI:

PREIT Means Luxury At A Discount (May 23, 2016): HOLD

PREIT Is Poised To Profit (January 30, 2017): BUY

As evidenced by the chart below, PEI is scraping the bottom:

PEI shares have under-performed the two closest peers, CBL and WPG:

Is this the bottom? Could we finally begin to see a reversal?

PREIT: The Beginning

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