Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, shopping mall operator Simon Property Group (NYSE: SPG ) has received the dreaded one-star ranking. Our data has shown that one-star stocks woefully lag the market average; conversely, five-star stocks outperform the S&P by a significant margin.
With that in mind, let's take a closer look at Simon's business, and see what CAPS investors are saying about the stock right now.
Simon facts
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Headquarters (founded)
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Indianapolis, Ind. (1960)
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Market Cap
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$9.93 billion
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Industry
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REIT
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TTM Revenue
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$3.77 billion
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Management
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Chairman/CEO David Simon
President/COO Richard Sokolov
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TTM Earnings Growth and Total Debt/Equity
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(26.5%) and 5.4
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Competitors
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General Growth Properties (NYSE: GGP )
Macerich (NYSE: MAC )
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CAPS members bearish on SPG also bearish on
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Vornado Realty Trust (NYSE: VNO )
Lennar (NYSE: LEN )
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CAPS members bullish on SPG also bullish on
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Bank of America (NYSE: BAC )
Johnson & Johnson (NYSE: JNJ )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 145 of the 192 All-Star members who have rated Simon -- or 75% -- believe the stock will underperform the S&P 500 going forward. Among the entire bearish population are SharpSEO, who is ranked in the top 10% of our community, and bruce7c.
Three weeks ago, SharpSEO brought Simon's startling balance sheet to our community's attention: "Look at the debt on this puppy ... Maybe [commercial real estate] will get their bailout, or be bailed-out via the U.S. Dept. of Citi. But stores are still closing, debt is coming due, consumer spending won't ever be the same. I'm stayin short."
In a pitch from four days earlier, bruce7c relies on experience to make his bear call:
[Simon's] income is dependent upon rental income from national chain store retailers. We can expect the closing of 35% of these tenant's stores which sell non essential items. As a commercial real estate broker of 35 years I am well versed in the ease of termination (through Chapter 11) of the leases on these Tenant's stores. ... Whether the malls and outlet stores have viable conversion uses will determine if [Simon Property Group] will exist in 5 years.
What do you think about Simon, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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