Trouble At Tanger: How You'll Know If It's Time To Sell

Summary

• Part of my analysis process involves annual updates to the quality ratings on all my watchlist companies, based on a three-metric 11-point scale.
• This determines what companies get a "blue-chip" and "SWAN" label and helps drive both my retirement portfolio decisions and well as my article recommendations.
• Last week, as part of my annual deep dive on Tanger for Simply Safe Dividends, Tanger was downgraded from level 9 SWAN to level 8 blue-chip.
• The weakened investing thesis isn't broken, but I'm watching long-term lease spreads and sales per square foot closely for signs that the fundamental business model remains viable.
• Tanger remains a strong buy today, but only for investors comfortable with turnaround stocks, and only as part of a well-diversified portfolio. Never forget that good risk management is key to long-term investing success.

(Source: imgflip)

Note this article was written and published after the collaboration I did with Brad Thomas on the 7 most undervalued REITs you can buy today. The timing of when those articles were published might create some confusion because Brad's article lists Tanger as a level 9 quality SWAN. The research underpinning the downgrade to level 8 blue-chip was done after that article was submitted. When I wrote my article I knew it was going to be published Monday, which is why I mention "last week" in the following article, regarding the timing of the downgrade.

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I've been a professional analyst and investment writer for five years now, and one of the core principles I have is to always strive to improve my analysis and investing strategy, by learned from history, and the greatest investors of all time (like Buffett, Lynch, Dodd, and Graham). That not just applies to the research I do at Simply Safe Dividends (covering over 200 companies per year) but also my Seeking Alpha articles and how I run my retirement portfolio, which contains my entire life savings.

Recently I finished recession-proofing my retirement portfolio, by adopting a pure Buffett-inspired deep value "fat pitch" investing style focused purely on blue-chips and sleep well at night or SWAN stocks, including on the 14 limit buy orders I currently have in place. I define blue-chips and SWANs (which have nothing to do with short-term price risk but company quality and dividend safety) using my new proprietary Sensei Quality Score or SQS. That scale ranks all companies in my watchlist (now at 119 companies and growing as I do SSD annual updates) on an 11-point scale based on three criteria:

• dividend safety (5 points): payout ratio, balance sheet, cash flow stability
• business model (3 points): "moatiness", ability to deliver returns

Analyst’s Disclosure:I am/we are long SKT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.