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Kimco: The Right REIT for Realty

08/28/2014 8:00 am EST


Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Our latest new recommendation is a New York-based real estate investment trust (REIT) that specializes in high-quality shopping centers around the country, explains Mark Skousen, editor of Fast Money Alert.

Kimco Realty Corp. (KIM) owns several hundred shopping centers primarily along the Eastern United States and the West Coast, with a few properties in Colorado, Texas, and the Midwest.

It seeks to upgrade properties to high-quality retail, which enjoys higher rents, higher income, and higher occupancy rates. Its goal is to be “the most valuable shopping center portfolio in the industry.”

So far it’s working. With profit margins exceeding 29%, earnings rose 75% in the most recent quarter to $201 million. Revenues rose 14% to $1 billion—the fastest among competitors and ahead of street estimates.

Kimco is doing so well that it has been increasing its dividend every year since the 2008 real estate crisis and now yields 3.8%.

Kimco continues to restructure its portfolio. It recently sold three shopping malls in Mexico and added a ten-property premium shopping portfolio in the Mid-Atlantic markets with anchor grocery stores like Safeway and Kroger.

Expressing confidence in the REIT and the growing consumer confidence in the country, Milton Cooper, the executive chairman of Kimco, bought 50,000 shares—or $1.1 million worth of stock—two weeks ago.

From a trader’s viewpoint, Kimco has a strong upward trend in the summer, and it tends to increase 92% of the time as we go into September. Let’s add Kimco Realty to our Fast Money Alert portfolio and set a protective stop of $18.50.

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