Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Tanger Factory Outlet Centers Is Spiking Higher Today

By Matthew Frankel, CFP® – Apr 7, 2020 at 10:51AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The outlet mall owner just gave investors renewed confidence in the future.

What happened

The stock market is having a strong day on Tuesday, with the S&P 500 higher by about 2% at 11:20 a.m. EDT. However, that gain is nothing compared to what we're seeing out of Tanger Factory Outlet Centers (SKT 0.66%), which is up by more than 30% today alone.

So what

There are two main reasons Tanger's stock is spiking higher. First, the overall stock market is moving higher, and the sectors that have been beaten down the most lately, such as retail and hospitality, are among the top performers. We're finally starting to see signs that the COVID-19 pandemic is reaching its peak, and investors are seeing light at the end of the tunnel.

Person holding shopping bags outside a store's entrance.

Image source: Getty Images.

Second, and more significantly, Tanger just announced its succession plan, under which CEO Steven Tanger (son of the company's founder) is stepping down from the top role at the end of 2020. Now, generally the market reacts negatively to a CEO's departure, but Tanger has made a pretty impressive hire.

The company's next CEO will be Stephen Yalof, who was just hired as president and COO, and who has been CEO of Simon Property Group's (SPG 0.70%) Premium Outlets brand since 2014. If you aren't familiar, Premium Outlets is the largest outlet brand in the business, so to put it in simple terms, Tanger couldn't have found someone with more relevant or successful experience.

In the same press release, Tanger also announced that its executive team and board have decided to temporarily reduce their salaries for the good of the company during this tough time.

Now what

For one thing, the press release and Yalof's hiring certainly give investors confidence that the company sees a bright future ahead of it. And if the COVID-19 pandemic starts to taper off sooner than previously expected, it could mean that Tanger's properties could be open within a few months.

While we're a long way from being out of the woods, Tanger investors now have fewer reasons to believe the company is in serious trouble, and that's why we're seeing such a move.

Matthew Frankel, CFP owns shares of Tanger Factory Outlet Centers. The Motley Fool recommends Tanger Factory Outlet Centers. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tanger Factory Outlet Centers, Inc. Stock Quote
Tanger Factory Outlet Centers, Inc.
$13.68 (0.66%) $0.09
Simon Property Group, Inc. Stock Quote
Simon Property Group, Inc.
$89.75 (0.70%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.