DDR: A Controversial High Yield Play

Controversial' as we all know, is often a euphemism for 'interesting and intelligent." ― Kevin Smith
Today, we take a look at a controversial high yield play that has seen some recent insider buying.
Company Overview: DDR Corp. (DDR) is a Beachwood, Ohio based shopping center REIT that is in the middle of a transformation through the disposition of certain assets and the repackaging of others that will be spun off as a separate REIT. Founded in 1965 as Developers Diversified, the company built its first store (a K-Mart) in 1967 and went public in 1993. The company's portfolio currently consists of 270 shopping malls, of which 134 are wholly-owned. The other 136 are unconsolidated joint venture properties. DDR's assets are in 32 states and Puerto Rico, covering ~92 million square feet of gross leasable area (GLA) and ~250 acres of undeveloped property. Its top three tenants are TJX Companies, Inc. (NYSE: TJX) - 4.3% of revenues, Bed Bath & Beyond Inc. (Nasdaq: BBBY) (3.5%), and PetSmart Inc. (Nasdaq: PETM) (2.7%). The company's makeover is being conducted by a new management team (headed by CEO David Lukes) that was brought on board in March 2017, marking the fourth CEO change since 2009. As can be seen below, it has been a tough journey for shareholders.

Current Strategy: Regardless of who has been in charge, DDR has been jettisoning assets - over $3 billion worth since 2015. Already down from 415 shopping malls at the end of 2014, the... Read more

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