Company Description
CBL & Associates Properties, Inc. is one of the top five owners
of shopping centers in North America and the largest owner of
malls and shopping centers in the Southeast, ranked by GLA owned.
CBL owns, holds interests in or manages 166 properties, including
69 enclosed regional malls. The properties are located in 28
states and total 71.5 million-square-feet including 2.0 million-
square-feet of non-owned shopping centers managed for third
parties. CBL has eight projects under construction totaling
approximately 2.1 million-square-feet including one regional mall
- Imperial Valley Mall in the Imperial Valley region of
California, an open-air shopping center in Southaven, (Memphis,
TN) MS, three community centers and three expansions. In addition
to its office in Chattanooga, TN, CBL has a regional office in
Boston (Waltham), MA. Additional information can be found at
www.cblproperties.com.
[Source: Company Press Release]
Reasons to Invest:
Turkey day is over and my stomach is as bloated as our
hypothetical portfolio. On top of that, December is just around
the corner and the markets are continuing their upward momentum.
If you can recall, last December the markets made major headway
before the start of the New Year. If we can see a continuation
of our current November 04 trend (3 out of 4 weeks closing
higher) we could see our overall hypothetical portfolio reaching
18-20% before 2005.
This week's Drip of the Week has been growing its equity with
vigor, climbing through a May 05 regression channel and posting
new 10-year (all time) highs along the way. Over the first three
quarters of this year revenues for CBL rose 11%, while net income
from continuing operations and applicable to Common grew 18%.
That's right, this self-managed real estate trust company has
been pushing their hypothetical glass ceiling ever so higher over
the past seven months.
CBL & Associates (NYSE:CBL) also boosted their quarterly dividend
on November 4th, to $0.8125 from $0.725. With an annual absolute
return of $3.25 per share owned per year (4.50% dividend yield),
dividend investors can't go wrong with this investment
opportunity.
If CBL does as well next year as it has this year, the next 52
weeks of trading may provide us with an additional 30% increase
in price. The company has tacked on just over 17 dollars in the
past 52 weeks, and I am hoping to see half of that much next
year. If we can cash in on a 15% increase in price and an
absolute return of 4.50% per share owned then we could see
approximately 20% on this investment over the next year. Not to
shabby, when you consider that Drip Advisor shoots for an annual
gain of ten percent per DRIP, per year. Did you know that over
half of our recommendations are well above the ten percent
margin?
On November 22nd, CBL acquired two malls from affiliates of
Enterprise Asset Management, for $249.4 million. A few weeks
before this announcement, the company raised their fiscal year
FFO guidance to $5.19 per share from $5.14 per share. This is
pretty impressive when you consider that this is the second time
the company raised their guidance, and then take into account
that the average analyst expectation is $5.02. Should CBL make
their expectations this should bode well for shareholders.
CBL $ Associates opened new facilities in August, September, and
October. This paints of picture of strength for the company,
because it appears that each of these acquisitions are occurring
in different states, helping CBL diversify their profitable
regions of operation.
To boot, CBL has an earnings per share growth rate of 59.14 over
the next year, 18.50 over the next three years, and 19.68 over
the next five years. Sales percentage growth rates are projected
to be 13.73 percent over the next year, 23.32 over the next three
years, and 21.26 over the next five years. Dividend percentage
growth rates are 15.95 percent for the next year, 9.66 over the
next three years, and 7.66 over the next five years. With that
in mind I have a low risk rating on new entries into their DRIP.
From a technical standpoint a few things are noteworthy. CBL's
ascending regression channel is tighter than most of the channels
that we have spotlighted on DripAdvisor. This means that support
and resistance are closer together, which can mean two things.
One, a few days of trend setting (either up or down) could cause
CBL to break over or under its channel at a moments notice,
ultimately leading to a sell-off. Two, if support and resistance
continue to hold as true form support and resistance, their stock
should continue to climb higher at a faster pace than a stock
that is in a wider ranged channel.
Also noteworthy, is the fact that the stock just set a new all
time high on Friday, despite the fact that the stock closed lower
on the day. CBL's minor loses on Friday were to be expected,
especially since the stock began the abbreviated trading session
over the top bar of its channel. Moreover, the stock has tacked
on more than four points over the past week of trading, extending
CBL into overbought territory on the Stochastics indicator.
Nonetheless, CBL's MACD indicator is still on a buy signal.
From a weekly standpoint, 20 of the past 29 weeks have closed in
the green. The MACD and Stochastics indicator are both on buy
signals. From a monthly perspective, 6 out of the past seven
months have closed higher. Again both of the indicators we watch
are on buy signals. CBL has a Point-and-Figure bullish price
objective of 80.00, which in my opinion, will be revised to 95 in
the next few months of trading.
Editor's Note: For those of you that added Nike to your portfolio
last November, they just boosted their quarterly dividend to
$0.25, from $0.20. Nike is currently up 27%, or +$17.84 since
being added to the hypothetical portfolio on November 28th, 2003.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Remember:
Plan your trade, and trade your plan.
Until Next Week,
Nich Sheldon
Editor In Chief
www.dripadvisor.com
questions@DripAdvisor.com
Broker Recommendations
Strong Buy 2
Buy 3
Hold 8
Sell 1
Strong Sell 0
Brokers Covering 14
DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $100-$5,000/quarter
Reinvestment Fees -
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A
Transfer Agent:
SunTrust Bank
800-568-3476
Corporate Headquarters:
CBL Center, 2030 Hamilton Place Blvd.
Chattanooga, TN 37421
Phone: (423) 855-0001
Fax: (423) 490-8662
(410) 659-0080
