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Friday, 08/20/2004

Rising Realty
By Nich Sheldon
KIM - Kimco Realty Corp

Company Description

Kimco, a publicly-traded real estate investment trust, has specialized in shopping center acquisitions, development and management for more than 40 years, and owns and operates the nation's largest portfolio of neighborhood and community shopping centers with interests in 691 properties comprising approximately 102.0 million square feet of leasable space located throughout 42 states, Canada and Mexico.

[Source: Company Press Release]

Reasons to Invest:

Wow! What a difference a week makes. Last week the markets looked like they couldn't weather any more bad news. While Crude continues to set record highs, investors managed to push the markets higher 4 out of the past 5 sessions. A quick look at the indexes and I am intrigued by the way the DJUSHB Dow Jones US Home Construction Index has fared over the past week. In fact, the index finally closed over its 100 DMA in consecutive sessions for the first time in 4 months. This is generally a good indication that builders and housing stocks are also going to be on the rise. For this reason, this week's DOTW is Kimco Realty Corp (NYSE:KIM).

Kimco just posted an increase in revenues of 16%, to $270.4 million, and an increase in net income of 26%, or $133.8 million for the first half of 2004. Not only are these figures impressive, but KIM also raised its fiscal 2004 guidance to $3.53/share, which is one cent over expectations of $3.52/share. Furthermore, they raised their fiscal 2005 guidance to $3.75- $3.82/share, which is also well above analyst expectations of $3.74/share. If Kimco can follow through with their estimates, than we can expect to be happy with our hypothetical investment in their stock.

From a technical standpoint, KIM's chart looks phenomenal. The stock has been in an ascending regression channel since October of 2002. It wasn't until March that the stock broke over the top bar of this channel, only to fall subject to some hardcore profit taking in April and May. Since May however, the stock has been trending back inside of its channel, using its moving averages as support for higher ground.

The daily/weekly charts note KIM on buy signals for both the MACD and Stochastics indicator. If the stock can remain inside of its channel we should be able to see a 3-5 point gain by year-end. While 3 to 5 points may not be that enticing, our plan isn't to sell the stock in 4 months. Our initial plan should be to hold this stock through 2005, and then re-evaluate our position at that time. Remember, it is important to not only have a plan, but to trade your plan. Actually every DRIP investor should remember this phrase, plan your trade, and trade your plan (at least this tangent is insightful - GRIN).

Did I mention that KIM also has an absolutely amazing Point-and- Figure chart? Kimco is trending in a Double-Top-Breakout pattern, with a Bullish price objective of 98.00. Yes, you read that right, ninety-eight. Do I think that the stock is going to make it this high? Yes. Do I think that the chances are good that we will still be enrolled when the price objective is met? Probably not. If the stock was to remain in its channel until October of 2008, then we may see the objective met, but this would require remaining involved in the DRIP for four years, and more importantly, it would require the stock to remain bullish for four years. I think the chances of the stock remaining in the channel are slim to none, especially since the stock has been in the channel for nearly two years now. Don't get me wrong; I am hoping to own the stock until it reaches about 75.00, which I think we could see over the course of the next 2.5-3 years.

Enough with my speculation lets talk dividends! Kimco has a hefty annual dividend of $2.28/share owned/year, or 4.73 percent.

This ends another exciting episode of the Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the limelight.

Until Next Week,
Nich Sheldon

Broker Recommendations

Strong Buy         4
Buy                6
Hold               8
Sell               0
Strong Sell        0

Brokers Covering  18

DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: No
Temper Enrollment: Yes

Min/Max Investment = $100-$25,000/quarter

Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A

Transfer Agent:

Corporate Headquarters:
3333 New Hyde Park Road
New Hyde Park, NY 11042
Phone: (516) 869-9000
Fax: (516) 869-9001


Copyright 2003

Do not duplicate or redistribute in any form.
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