iREIT Daily

Breaking News on the Bank Front

Brad Thomas

467 postsJuly 15, 2022

Earnings season is upon us. So let’s buckle down and deal with it as-is like the big boys and girls that we are.

So far, there isn’t a whole lot of good news to report among big banks, at least. The data we’re seeing from American monoliths of monetary influence like JPMorgan Chase (JPM) and Morgan Stanley (MS)…?

They just do not impress.

As The Wall Street Journal reports:

“JPMorgan Chase shares fell 4.2% after the bank on Thursday set aside another $428 million to cover possible future loan losses, suggesting it was concerned about the economic outlook.
“Morgan Stanley shares slipped 2.4% after it said profit slumped 29% in the second quarter. Both banks reported earnings per share that missed analysts’ forecasts, suggesting that earnings estimates are too optimistic.”

And Bank of America (BAC) now expects a recession this year. Just a mild one, it says, but remember how big banks were all saying we’d avoid that kind of downturn altogether not too long ago.

Then it was we’re headed for one “next year.”

But the economic numbers keep coming in unexpectedly bad, forcing them to keep changing their expectations. On the one hand, adapting to new data with new conclusions is the mark of a sane person.

On the other hand, a sane person might also stop painting the rosiest picture possible at some point.

Since I do most definitely try to be sane, I’ll be closely watching today’s news as more big financial institutions report their earnings. I’m talking blue-chip institutions such as:

Blackrock (BLK)
Citigroup (C)
U.S. Bancorp (USB).

And Monday, Bank of America and Goldman Sachs (GS) are slated to give updates as well.

Between inflation and interest rate increases, they’re in a tough position. Add in an economic downturn, and we’ve got loan repayments in jeopardy, demand falling, and profits dropping too.

As The Washington Post references: “The nation’s four biggest banks – JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America – could record a $3.5 billion loss, Gerard Cassidy, the managing director of RBC Capital Markets, told Reuters.”

Thankfully, our off-Wall Street economy is continuing to perform, even in these tough economic times. At last check, the banks that have reported saw deposits grow in the second quarter and borrowers continue to repay debts.

This is a sign of economic resilience on the part of everyday citizens. Though the trickle-down effects from everything else could be waiting in the wings.

More Non-REIT News to Know About

Okay. Time for some positive news now.

Yesterday, in my comprehensive breakdown of inflationary impacts, I noted one hard-hit item in particular: the hotdog.

As CPI data was released yesterday, many were staggered by the 16.3% increase in cost. This, I thought was especially indicative – a sort of metaphor for the troubled state of the American economy.

After all, what’s more American than the hotdog?

From there, it got me thinking about the last truly inflation-proof item this world apparently has to offer. Ironically, it’s a hot dog and soda combo at Costco (COST) for just $1.50.

Since 1985, this all-American shopping staple has never and will never exceed its $1.50 price tag, we’re told. “That $1.50 price point has been sacrosanct from the very beginning,” said Richard Galanti, the company’s CFO.

The multinational wholesale corporation sells about 130 million hot dogs each year. And if its signature combo kept up with inflation, you’d be paying nearly $5 a pop.

That puts a whole new perspective on inflation.

If all this sounds more silly than positive though, look at it this way: Even during this insane inflationary period, there are still free-market entities that are doing their best to keep the consumer in mind.

If the hot dog is a metaphor for the economy, maybe Costco’s combo represents the resilience of our market.

The World According to REITs

While we’re talking about retail, I want to highlight a retail real estate investment trust (REIT) – one that might be worthy of one’s watchlist. This is another hold, admittedly, but it’s caught many people’s attention lately.

Whitestone REIT (WSR) is a leader in acquiring, developing, managing, and leasing properties for the needs of communities across the country. This REIT is attractive for several different reasons. In terms of both short and long-term indicators, it has a lot going for it.

With an upward trend in earnings estimate revisions, many are bullish on its fundamentals going forward. In fact, over the last month, its consensus EPS has increased 3.8%.

That means sell-side analysts anticipate its second-quarter earnings will be higher than originally predicted.

Acquisitions are also strong at Whitestone. The company just announced the purchase of an 89,746-square-foot shopping center in Austin, Texas. The addition brings its total leasable square feet in the region to approximately 734,000.

Its stock has been trading neutrally lately. But InvestorsObserver gives it a 77% favorable rating and premium status across:

Stock sentiment
Valuation
Fundamentals
Both short and long-term technical analysis.

This is its highest praise for any retail sector REIT.

Again, I have it as a Hold for now, but I’ve got my eye on it nonetheless. Perhaps you should too.

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly by buying in at inflated prices.

Happy Investing

Brad Thomas

467 posts

View all my Posts

Brad Thomas is Senior Research Analyst at iREIT and CEO of Wide Moat Research LLC. With over 30 years of real estate experience, he is also long-time Editor of Forbes Real Estate Investor, a monthly subscription-based newsletter that dives deep into the vast world of profitable properties, and since 2021, he has served as an adjunct professor at New York University.

Thomas has also been featured on or in Forbes magazine, Kiplinger's, U.S. News and World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. And he was the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 based on both page views and number of followers.

Thomas is the recently-published author of The Intelligent REIT Investor Guide (2021), co-author of The Intelligent REIT Investor (2016), and he wrote The Trump Factor: Unlocking The Secrets Behind The Trump Empire (2016) - all available on Amazon.

Thomas received a bachelor of science in business/economics from Presbyterian College and is married with five wonderful kids.

Dividend Growth Stock of the Week: Cummins

REIT Mutual Fund	Symbol
Alpine Realty Income and Growth Fund	AIGYX, AIAGX
American Century Real Estate Fund	REAIX, REACX, AREEX, AREWX, ARYCX, AREDX
Real Estate Securities Fund	MRESX
AR Capital Real Estate Income Fund	ARIAX, ARICX, ARIPX
AssetMark Real Estate Securities Fund	AFREX
Aston/Harrison Street Real Estate Fund	AARIX, ARFCX
Baron Real Estate Fund	BREIX, BREFX
BlackRock Real Estate Securities	BIREX, BAREX, BCREX
Brookfield U.S. Listed Real Estate Fund	BRUAX, BRUCX, BRUIX, BRUYX
CGM Realty Fund	CGMRX
West Loop Realty Fund	REIIX, REIAX, REICX
Cohen & Steers Institutional Realty Shares	CSRIX
Cohen & Steers Realty Income Fund	CSEIX, CSDIX, CSBIX, CSCIX
Cohen & Steers Realty Shares	CSRSX
Columbia Real Estate Equity Fund	CREAX, CREIX, CRRVX, CRERX, CREEX, CRRFX, CREWX, CRECX, CREBX
Compass EMP REC Enhanced Volatility Weighted Fund	CWRAX, CWRIX, CWRTX, CWRCX
Davis Real Estate Fund	RPFRX, DREYX, DRECX, DREBX
Delaware Real Estate Investment Trust Portfolio II	DPRTX, DPRBX
Delaware Real Estate Investment Trust Portfolio	DPREX, DPRSX, DPRRX, DPRCX
DFA Real Estate Securities Portfolio	DFREX
Dunham Real Estate Stock Fund	DAREX, DNREX, DCREX
DWS RREEF Real Estate Securities Fund	RRRRX, RRREX, RRRAX, RRRSX, RRRBX, RRRCX
DWS RREEF Real Estate Securities Income Fund	REFAX, REFCX, REFIX, REFSX
Eaton Vance Real Estate Fund	EAREX, EIREX
EII Realty Securities Fund	EIIRX
Fidelity Advisor Real Estate Fund	FHEIX, FHEAX, FHETX, FHECX, FHEBX
Fidelity Advisor Real Estate Income Fund	FRIRX, FRIQX, FRINX, FRIOX
Fidelity Real Estate Income Fund	FRIFX
Fidelity Real Estate Investment Portfolio	FRESX
Fidelity Spartan Real Estate Index Fund	FSRNX, FRXIX, FSRVX
Fidelity Series Real Estate Equity Fund	FREDX, FREFX
Fidelity Series Real Estate Income Fund	FSREX, FSRWX
Forward Real Estate Long/Short Fund	KSRYX, FRLSX, FFSRX, KSRAX, KSRCX, KSRBX
Forward Real Estate Fund	FPREX, FFREX, KREAX, KRECX
Forward Select Income Fund	KIFYX, FSIMX, FFSLX, KIFAX, KIFBX, KIFCX
Franklin Real Estate Securities Fund	FREEX, FRLAX, FRRSX, FSERX
GMO Real Estate Fund	GMORX
Goldman Sachs Real Estate Securities Fund	GREIX, GRETX, GREAX, GRESX, GRERX, GREBX, GRECX
Great-West Real Estate Fund	MXREX
Heitman REIT Fund	OARTX, OBRTX
ING Real Estate Fund	CRARX, IREWX, IDROX, CLARX, CRWRX, CRCRX, CRBCX
INVESCO Real Estate Fund	REINX, IARFX, IARIX, IARYX, IARAX, IARRX, IARCX, AARBX
Ivy Real Estate Securities Fund	IRSAX, IREIX, IRSYX, IRSRX, IREEX, IRSCX, IRSBX
John Hancock Real Estate Securities Fund	JIREX
Johnson Realty Fund	JRLTX
J.P.Morgan Realty Income Fund	URTLX, JRIRX, URTAX, URTBX, URTCX
J.P. Morgan Security Capital U.S. Core Real Estate Securities Fund	CEEAX, CEERX, CEEFX, CEESX, CEECX
J.P. Morgan U.S. Real Estate Fund	SUSIX
Lazard U.S. Realty Equity Portfolio	LREIX, LREOX
Lazard U.S. Realty Income Portfolio	LRIIX, LRIOX
Manning & Napier Real Estate Series	MNRIX, MNREX
Morgan Stanley Institutional U.S. Real Estate Portfolio	MSUSX, MUSDX, MSULX, MURSX
Natixis AEW Real Estate Fund	NRFAX, NRFYX, NRFBX, NRFCX, NRFNX
Neuberger Berman Real Estate Fund	NBRIX, NBRFX, NREAX, NRERX, NRECX, NRREX
Nuveen Real Estate Securities Fund	FREAX, FARCX, FRSSX, FREBX, FRLCX, FREGX
Oppenheimer Real Estate Fund	OREAX, OREIX, OREYX, ORENX, OREBX, ORECX
PHOCAS Real Estate Fund	PHREX
PIMCO RealEstateRealReturn Strategy Fund	PRRSX, PETPX, PETAX, PETDX, PETCX, PETBX
Pioneer Real Estate Shares	PWREX, PYREX, PCREX, PBREX
Principal Real Estate Securities Fund	PIREX, PIRPX, PREPX, PRETX, PREJX, PRRAX, PRERX, PRENX, PRAEX, PRCEX, PRLEX
ProFunds Real Estate UltraSector ProFund	REPIX
Prudential Select Real Estate Fund	SREAX
Prudential U.S. Real Estate Fund	PJEAX, PJEZX, PJECX, PJEBX
REMS Real Estate Income 50/50 Portfolio	RREIX
REMS Real Estate Value-Opportunity Fund	HLRRX, HLPPX
Rydex Real Estate Fund	RYREX, RYHRX, RYCRX
SA Real Estate Securities Fund	SAREX
SEI Institutional Mgd Real Estate Fund	SETAX, SEIRX
Spirit of America Real Estate Income & Growth Fund	SOAAX
SSgA Clarion Real Estate Fund	SSREX
Stratton Real Estate Fund	STMDX
T.Rowe Price Real Estate Fund	TRREX, PAREX
TIAA-CREF Real Estate Securities Fund	TIREX, TRRPX, TRRSX, TCREX
Vanguard REIT Index Fund	VGSNX, VGRSX, VGSLX, VGSIX
Virtus Real Estate Securities Fund	PHRAX, PHRIX, PHRCX, PHRBX

REIT ETF	Symbol
Flex Shares	ASET
Wisdom Tree Global Ex-US	DRW
S&P 500 Equal Weight	EWRE
iShares FTSE Industrial/Office	FNIO
MSCI Real Estate Index	FREL
S&P REIT Index	FRI
First Trust S&P REIT	FRI
iShares Real Estate 50	FTY
Flexshares Global	GQRE
iShares Cohen & Streers	ICF
iShares International Developed RE	IFGL
iShares US RE	IYR
Premium Yield Equity REIT	KBWY
ETRACS Monthly Pay 2x Leverage	MORL
Market Vector Mortgage	MORT
iShares Global REIT	REET
iShares FTSE Mortgage	REM
iShares Residential	REZ
IQ US Real Estate Small Cap	ROOF
iShares FTSE NAREIT Retail	RTL
DOW Jones Global RE	RWO
SPDR Dow Jones	RWR
Schwab US REIT	SCHH
Super Dividend REIT	SRET
ProShares Ultra RE	URE
Vanguard REIT	VNQ
Vanguard Global ex-US	VNQI
iShares International Developed	WPS
Wilshire US REIT	WREI
Pacer Benchmark Data & Infrastructure RE	SRVR
Pacer Benchmark Industrial RE	INDS
Pacer Benchmark Retail RE	RTL
Hoya Capital Housing	HOMZ
NetLease Corporate RE	NETL

REIT Name	Ticker	Annual Increases/yr
Federal Realty	FRT	51
Universal Health Realty	UHT	33
National Retail Properties	NNN	29
Realty Income	O	27
Tanger Outlets	SKT	26
Urstadt Biddle	UBA	25
Essex Property Trust	ESS	25
W.P.Carey	WPC	22
National Health Investors	NHI	17
Equity Lifestyle	ELS	15
Digital Realty	DLR	15

Breaking News on the Bank Front

Brad Thomas

467 postsJuly 15, 2022

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Breaking News on the Bank Front

467 postsJuly 15, 2022

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