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Bear Of The Day: Clipper Realty (CLPR)

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Clipper Realty (CLPR - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today.  I see a lot of REIT's are sitting with a Zacks Rank #5 (Strong Sell) so this is not a company specific issue.  I should also note that this is a pretty small company and I don't want to pick on them as much as I want to give them a chance to shine in the spotlight.  After all, in the world of REITs, a $100M market cap is probably holding them back from getting into a lot of meetings.

As a former research analyst I remember covering some of the smaller stocks and the CFO would complain that their market cap would keep them out of the office of the big mutual funds are pension funds.  They always wanted to see a name with at least $1B in market cap... so this Bear of the Day is really not intended to kick this company when its down.

So Why The Low Zacks Rank?

The Zacks Rank looks at all the earnings estimates that are submitted from any analyst that covers the stock.  That could mean Goldman Sachs or Needham or whomever covers the name and also submits a model wih their report.  

When those analysts lower estimates, then the Rank tends to follow suit.

CLPR Estimates

When I look at the detailed estimates page for CLPR, I see the estimates are moving a little lower.

This quarter dropped from $0.16 to $0.13 and next quarter also fell by 3 cents over the last 30 days.

The Zacks Rank cares more about the movement in annual numbers, and I see some similiar moves for CLPR there too.  

At the same time, this stock is showing a profit and is looking at some pretty solid earnings growth for 2021.  Both are excellent reasons to dig a little deeper into this name.

Valuation

I see a 13x forward earnings multiple which is a little high for REIT, but when I see 8% topline growth I also think of that as being a little high for a REIT.  These should cancel each other out... but this next item is not something that is easy to forget.  I see a 0.86x book multiple and for long term value investors, that number is like a dinner bell.  I don't think I need to say anything more about this "Bear" of the Day!

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