![]() ![]() And while this is an extremely steep decline of 73% for the bottom line, we should pay much more attention to funds from operations (FFO) as it is a better metric for the state of the business. And net income declined from $544 million in the third quarter of 2019 to $146 million in the last quarter (basic and diluted earnings per share declined in a similar way from $1.77 to $0.48). Total operating income declined even steeper: from $705 million in the same quarter last year to $404 million right now reflecting a decline of 43%. In the three months ending September 30, 2020, total revenue for Simon Property Group was $1,061 million – compared to the same quarter last year, this is a decline of 25% for the top line. Similar to the last two quarters, Simon Property Group had to report mediocre results once again. Let’s start by looking at the current state of the business. And for the rest of the article, I will analyze if Simon Property Group is still a good investment or if we have missed the buying opportunity. The stock is trading 50% higher and I have to decide once again, if it is still a good investment at this point – knowing, that I could have bought the stock much cheaper. But I am too greedy and I am not pulling the trigger at the right moment, which creates the situation I am facing right now with Simon Property Group. I am doing a pretty good job analyzing a business and determining what a fair, intrinsic value should be. This is one of the major challenges I am facing as an investor and a problem I have to resolve for myself. However, there seems to be a point where an investor can be too greedy and the market realizes how undervalued the stock actually is resulting in a reversion to the mean instead of even lower stock prices. Of course, it makes sense, to buy a stock as cheap as possible. ![]() I was simply too greedy and did not buy a stock I considered to be extremely undervalued because I was hoping for even lower stock prices – although the stock was trading already at an almost 50% discount. And while I was hoping for lower stock prices, BioNTech announced it was successful in searching for a COVID-19 vaccine and the stock jumped. And although the stock was a great bargain already, I was determined to get the stock even cheaper (maybe I was hoping for the stock to return to the March 2020 lows, I honestly can’t recall my reasoning). But the stock was on my watchlist, when it was trading in the low 60s and I was convinced, that Simon Property Group was extremely undervalued as the stock was trading about 50% below the calculated intrinsic value of $113 ( see my last article). Back then, the stock was not on my watchlist, so I could not have bought it. ![]() Simon Property Group declined to $42 in March 2020, which was an extreme overreaction caused by the pandemic. But before I will dive deeper into the business, I would like to talk a little bit about investing psychology and one of the major mistakes I made in 2020. In the following article I will analyze Simon Property Group once again and try to determine if the stock is still a good investment at this point. ![]() It only took a few trading days for the stock to move 50% higher from about $60 to above $90. Combined with Joe Biden winning the election, this led to a rally for the stock market overall, but for Simon Property Group in particular. The article was released a few days before the world learned, that BioNTech ( BNTX) had been successful in creating a vaccine, that was 95% effective. In October 2020, I published my first and last article about Simon Property Group ( NYSE: SPG). ![]()
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