Please ensure Javascript is enabled for purposes of website accessibility

4 REITs Short-Sellers Can't Get Enough of

By Matthew Frankel, CFP® - Feb 17, 2021 at 6:41AM

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

It isn't just GameStop and AMC -- these real estate investment trusts are big shorting targets.

In the recent wave of short squeezes, most headlines focused on stocks like GameStop (GME -0.46%) and AMC Entertainment Holdings (AMC -0.73%), but those weren't the only two companies affected. There were several real estate investment trusts, or REITs, that saw their stocks swing violently due to their own high short interest. In this Fool Live video clip, recorded on Feb. 8, Fool.com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss five REITs with high short interest and why so many short-sellers are betting against them.

Matt Frankel: No. 1 is Macerich (MAC -2.13%), ticker symbol MAC. They are a mall operator, they're a Simon (SPG -2.41%) competitor. Not quite as well-to-do financially as Simon is, which is why people seem to be betting against it. Simon is not on the list. Macerich is 57% short interest.

Jason Moser: Wow.

Frankel: That's the highest of all these. Tanger Factory Outlets (SKT -0.91%) is No. 2, ticker symbol is SKT. Their short interest is 52.4% right now, so more than half the float is sold short.

Moser: Wow.

Frankel: People do not have a positive outlook on the outlet industry going forward apparently.

Moser: Apparently not.

Frankel: No. 3 is Seritage Growth Properties (SRG -0.76%), which we talked about. I can understand why people are betting against them. I'm a shareholder. I completely understand the other side of the coin in that one. [laughs] It's a REIT that's losing money, which is really rare.

Moser: Yeah.

Frankel: Their whole business model is redevelopment. That costs money. I always joke that they were designed to become a Sears landlord, and even Sears didn't want to own Sears properties at that point. [laughs] No. 4, this one actually surprised me is Iron Mountain (IRM 1.06%).

Moser: Oh, yeah. The document management.

Frankel: The document management but they're slowly and quietly getting you to the data center space.

Moser: Yeah.

Frankel: Which is the most promising side of the business from a long-term perspective. But it's that legacy document storage business that I think is scaring a lot of investors away, and theirs is 17.5%. A lot of people are bidding against some of these financial and real estate companies. We saw Tanger, and Seritage and Macerich. Those were really short squeezed during the GameStop thing. Tanger went up at 50% one day. The short squeeze went beyond GameStop, and AMC, I'll put it that way.

Moser: Yeah, I can imagine. 

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.
SKT
$14.22 (-0.91%) $0.13
Simon Property Group, Inc. Stock Quote
Simon Property Group, Inc.
SPG
$94.92 (-2.41%) $-2.34
GameStop Corp. Stock Quote
GameStop Corp.
GME
$122.30 (-0.46%) $0.56
The Macerich Company Stock Quote
The Macerich Company
MAC
$8.71 (-2.13%) $0.19
Iron Mountain Incorporated Stock Quote
Iron Mountain Incorporated
IRM
$48.69 (1.06%) $0.51
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$13.55 (-0.73%) $0.10
Seritage Growth Properties Stock Quote
Seritage Growth Properties
SRG
$5.21 (-0.76%) $0.04

*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
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

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.