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Simon Property Group (SPG) Is Today's Storm The Castle Stock

Stock quotes in this article: SPG

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Simon Property Group ( SPG) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Simon Property Group as such a stock due to the following factors:

  • SPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $204.3 million.
  • SPG has traded 1.3 million shares today.
  • SPG is trading at 4.14 times the normal volume for the stock at this time of day.
  • SPG crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SPG with the Ticky from Trade-Ideas. See the FREE profile for SPG NOW at Trade-Ideas

More details on SPG:

Simon Property Group, Inc. is an independent equity real estate investment trust. It engages in investment, ownership, and management of properties. The firm invests in the real estate markets across the globe. The stock currently has a dividend yield of 3.1%. SPG has a PE ratio of 38.9. Currently there are 15 analysts that rate Simon Property Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Simon Property Group has been 1.3 million shares per day over the past 30 days. Simon Property Group has a market cap of $46.5 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.85 and a short float of 2% with 3.82 days to cover. Shares are down 5.1% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Simon Property Group as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, expanding profit margins and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 57.6% when compared to the same quarter one year prior, rising from $216.28 million to $340.77 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has slightly increased to $682.44 million or 8.97% when compared to the same quarter last year. In addition, SIMON PROPERTY GROUP INC has also modestly surpassed the industry average cash flow growth rate of 6.41%.
  • 48.06% is the gross profit margin for SIMON PROPERTY GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 26.35% trails the industry average.
  • SIMON PROPERTY GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SIMON PROPERTY GROUP INC increased its bottom line by earning $4.74 versus $3.48 in the prior year. For the next year, the market is expecting a contraction of 14.3% in earnings ($4.06 versus $4.74).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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