Insiders Fail to ‘Socially Distance’ Themselves from Buying Shares of This Company at Ridiculous Prices

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  • State health authorities have continued to ramp up social distancing measures across the country. That has resulted in many mall closures and other retail properties. Virtually every mall and strip mall parking lot finds itself barren as these “nonessential” operations are forced to close their doors indefinitely. This places real estate owners and managers in a difficult position as many companies may be shutting their doors for good or suspending their rent payment.

    Simon Property Group, Inc (SPG) is an Indianapolis-based REIT that is the global leader in ownership of shopping, dining, entertainment and mixed-use destinations. They own properties across North America, Asia and Europe. Since its peak near $230 in 2016, SPG has traded recently as much as 81% lower from that peak.

    With the price of SPG trading so far below its all-time high, insiders have been talking the opportunity to buy up a significant amount of shares. For example, the company’s chairman, David Simon, recently purchased over $9M in shares on March 18, 2020. Since March 1, nine total insiders have increased their ownership totaling over 372,000 shares.

    According to CNBC, the investment industry has seen the highest amount of insider buying of any other industry. They estimate that 36% of all purchases from 134 insiders totaling $78.3 million. This has surpassed computer manufacturing and oil with $26.25 million and $22.57 million in purchases respectively.

    Action to Take: SPG is a long opportunity with a potential target of $106, which is near the 61.8% retracement of the downtrend from February 21.

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