For the Executive Decision segment of his "Mad Money" program Thursday, Jim Cramer spoke with Jim Taylor, president and CEO of Brixmor Property Group (BRX) , a retail REIT with a focus on outdoor retail centers and a 5.3% dividend yield.
Taylor said business is good at Brixmor and it currently enjoys an 85% occupancy rate that's trending toward 90%.
When asked about the disruption in retail, Taylor said that change is good in its business because it allows Brixmor to replace ailing tenants with more relevant ones. Overall, Taylor said, Brixmor's retail tenants are doing a great job adapting to the needs of their customers. The trend of buying online and picking up in stores is gaining a lot of traction, he said, and Brixmor is reserving more parking spots for pickup all the time.
Cramer said there aren't many ways to get a yield more than 5%, but Brixmor is one of them. Let's add the charts to the discussion.
In this daily bar chart of BRX, below, we can see that prices have moved higher from their December/January lows, but let's look closer. Yes, BRX is above the rising 50-day moving average line as well as the rising 200-day line. However, prices look extended above the longer 200-day average. Way back in the 1960s when the late Joseph Granville laid out his eight rules on the 200-day moving average, he noted there was a tendency when prices got too far above the 200-day average for prices to pull back down toward the line. I cannot see that the trading volume has increased this year, but the daily On-Balance-Volume (OBV) line has risen steadily higher to tell us that buyers of BRX have been more aggressive.
The 12-day price momentum study in the bottom panel of the chart shows equal momentum highs in September and November even though prices made higher highs. This is one category of bearish divergence and is a heads up that prices could correct in the days and weeks ahead.
In this weekly bar chart of BRX, below, we can see that Brixmor over the past three years has made an impressive base pattern. We could use it in a textbook. Prices are moving up nicely above the rising 40-week moving average line, and like the 200-day line prices are a little extended. The weekly OBV line shows a bullish pattern the past 12 months to confirm the price gains and the Moving Average Convergence Divergence (MACD) oscillator has been in a bullish mode all year.
In this Point and Figure chart of BRX, below, we can see that prices have shot straight up (think extended) on this kind of chart. A possible longer-term price target of $31 is indicated, but a period of consolidation or sideways to lower price action would be a good thing for longer-term gains.
Bottom line strategy: Because BRX looks extended on all three charts above, I would wait for a sideways to lower correction to unfold before buying. With a juicy yield and a $31 price target, BRX is definitely going on my shopping list.