Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

CBL & Associates Is Poised To Profit On J.C. Penney's Potential Demise

The Buy Thesis

CBL & Associates (NYSE:CBL) trades at a substantially lower multiple, relative to peers, than it should. There are two aspects in particular that we believe the market is mispricing.

  1. J.C. Penney's (NYSE:JCP) contracts with CBL are at risk and viewed as a net loss, but are actually an opportunity.
  2. CBL's valuation is being overly punished for the age of their properties.

We view each of these as a positive catalyst going forward as the correction of the market's perception would lead to multiple expansion. Let us examine each catalyst in more detail.

Catalyst #1: Turmoil at JCP

There is a fair amount of debate about the future of JCP and its implications reach...

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