Diversified real estate holder Thomas Properties Group Inc (NASDAQ: TPGI) really had an awful August, plummeting 28% this month as REITs and real estate companies really ‘took it on the chin’ during the broader markets decline. The question posed is can the stock make up that loss as the market recovers? I think it can and here’s why…
First of all to be clear; Thomas Properties Group Inc (NASDAQ: TPGI) is not a REIT. With that said, I think any real estate proposition is a Long-Term play and speculators need to stay on the sidelines. From a contrarian point of view, which I often like to take, I think real estate companies flow up with the market and when the bears come out; gold flows up, and now apparently copper and diamonds too.
I like this Company and think it undervalued by at least $1 in share valuation currently. One thing I like is its diversity. If you look at its portfolio you’ll find Thomas Properties Group Inc (NASDAQ: TPGI) owns a lot of apartments and rentable space in addition to commercial properties and parking lots. Any homebuilder will tell you that for the foreseeable future: apartments are the way to go for new construction.
The other thing I like is the regional ‘hedge’ the Company has going: its properties are in Pennsylvania, Texas, California, and Virginia. When one region suffers economically more than another, geographic diversity becomes the balancing factor to the bottom line.
The shares have traded most of 2011 between $3 and $4.25, with normal dips and spikes and there are very few short sellers to apply any downward pressure. The stock is currently trading in the $2.77 range after the broader market bloodletting and that’s a very ‘Attractive’ entry level price for new buyer. I’ sure faithful shareholders are aggregating to hedge their positions.
The shares may not rise back to August first levels as fast as they fell, it may be an ‘immediate’ play, six weeks, but if the bulls can corner the markets in the months ahead, it will be good news for Thomas Properties Group Inc (NASDAQ: TPGI).