Monday, September 14, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

The high priority data reports coming in this week are: Tuesday US Advance Retail Sales for August. Wednesday UK Jobless Claims for August, Japan BSI for the 3rd Quarter, and Japan Tertiary Index for July. Thursday Canada Consumer Price Index for August, and Switzerland Interest Rate Decision, plus a multitude of other important reports. October is getting close, the market is still heading higher, the problems are still around . . . it’s starting to feel like 1987 again possibly.

My Stock Pick This Week

Is a short sell on a Commercial Real Estate Investment Trust. Two Weeks ago, I placed a short sell on another REIT, Ticker AIV. The good real estate numbers that came in last week on could easily have been foreclosure sales I’m betting. Commercial real estate which this company is mainly involved with is watching along with the US Taxpayer as US banks are currently writing off commercial real estate loan losses that may possibly reach up to $30 billion by the end of the year. Commercial real estate delinquencies hit 4% plus in the second quarter of this year which is double from a year ago. Bernanke told Congress that possible defaults on hundreds of billions of dollars of commercial mortgages presents a difficult challenge. In my opinion the worst is yet to come for the real estate markets, and lower real estate prices and rents are coming first before any upside second.

Sell Short ProLogis – Ticker PLD

Sell Entry: 12.03 to 11.47

Stop-Loss: 12.21 or Higher

Take Profit Areas: 10.91 to 9.79, 9.03 to 7.99, 7.29 and Lower

ProLogis Company Profile

ProLogis operates as a real estate investment trust in the United States. It owns, operates, and develops industrial distribution properties in North America, Europe, and Asia. The company operates in three segments: Property Operations, Fund Management, and Corporate Distribution Facilities Services (CDFS). The Property Operations segment engages in the ownership, management, and leasing of industrial distribution and retail properties. As of December 31, 2005, this segment consisted of 1,461 operating properties with approximately 186.7 million square feet. The Fund Management segment provides investment management services for unconsolidated property funds and other properties. As of the above date, this segment had investments in approximately 14 property funds. The CDFS segment primarily develops properties that are contributed to a property fund or sold to third parties. This segment also engages in commercial mixed-use development activities, such as selling the land or completed projects to third parties. As of the above date, this segment had approximately 72 distribution properties. As a REIT, the company would not be subject to federal tax to the extent that it distributes at least 90% of its taxable income to its shareholders. It has a strategic cooperation agreement with China National Materials Storage & Transportation Co. and Zhongchu Development Stock Co., Ltd. to develop logistics and storage markets. The company also has a joint venture agreement with K Raheja Corp. for the acquisition and development of properties in Mumbai, Chennai, Delhi, Bengaluru, Kolkata, and Pune, India. ProLogis was founded as Security Capital Industrial Trust in 1991 and changed its name to ProLogis Trust in 1998. Subsequently, it changed its name to ProLogis. The company is headquartered in Denver, Colorado.

Click here to review and trial the Trading Software we used in determining our short position on PLD.

Click the ProLogis Stock Chart for a larger view.