4-28-09 - Thomas Properties Group Inc. (TPGI): On the Perfect Stock Radar

At the beginning of this week, the main story was the swine flu. Tomorrow, the headlines will probably center around Dendreon and its massive turnaround from the bear raid earlier today. The fact that all cancer stocks should fly tomorrow makes me regret not writing that post about Cell Genesys (CEGE). For those of you that don't read the post comments, I mentioned a little over a week ago that I thought CEGE could ride Dendreon's coattails. Anyway, a lot of these biotechs have massive run ups during the premarket, which often make it difficult for people to buy in at a decent price. This can be very frustrating.

As a result, I decided to change up the post a little bit today. In order to really make money, you need to buy or target a stock before the run starts. So, this post will be about a stock that is not yet perfect, but is setting up to possibly be one. The stock on the perfect stock radar is Thomas Properties Group, Inc. (TPGI).


Thomas Properties Group is a real estate company that owns, acquires, develops and manages offices, as well as mixed-use and residential properties. So why is TPGI on my perfect stock radar? Well, it already has a lot of perfect stock qualities:

1. It's in a beaten down sector that's now on the rise - Real estate operations stocks like REITs and property management companies, which were taken down with the housing bubble, have been steadily climbing the last two months.
2. There's been lots of insider buying - TPGI's CEO has been aggressively accumulating shares. He has purchased approximately 200,000 shares in total the last 4 to 5 months. http://www.gurufocus.com/news.php?id=52396
3. The company has had some positive news - On 4/3/09, it was announced that the company was retained by Korean Air to develop a nearly 1.8 million-square-foot office, retail, condo and hotel project on the southwest corner of Wilshire and Figueroa in Los Angeles' financial district. The new complex is expected to cost $1 billion.

Even more impressive than the things listed above is the fact the company continues to pay a small dividend and per their last earnings report, they do not have any major capitalization issues and have very stable tenants.



With so many great things going for Thomas Properties Group you may be asking why is it just on the radar? Really, it's there for just one reason: Technicals.



See TPGI's chart below:









As you can see from the chart, the stock bottomed 2 months ago and has been trading sideways ever since. Such a pattern is often considered bullish because lengthy consolidations such as this typically yield explosive moves up once a reversal occurs. The stagnation of the trading pattern also shows that the stock has yet to participate in the real estate operations run i mentioned earlier. With the stock currently at $1.27/share it needs to show some upward momentum before it screams "buy".

The Quarter 1 2009 earnings report is scheduled for May 5. There is a very strong chance that a lot of investors are waiting on the sidelines to see if anything overly negative pops up during the report before buying. Also, TGPI has less than 25 million outstanding shares and heavy institutional ownership. If the report is pretty clean and the stock gets some positive momentum, it won't require that much for it to hit $3.00/share quickly.

I feel the downside in this stock is minimal, but the upside is tremendous. The earnings report appears to be the catalyst to get this stock moving. If it's favorable, look out! Right now, the technicals show only a potential breakout. That's not quite enough to make TGPI perfect, but it definitely puts it on the radar.