Conclusion, Investment Implications, Strategy
CBRE Group (CBRE) appears to be resuming its 4th Quarter 2020 major uptrend amid quarterly relative performance versus the benchmark S&P 500 (SPX). A sustained rise above the $63.37 area would help confirm this and target an additional 12% rise to $74.20 per share. This is an Asbury Momentum trade idea.
Analysis and Rationale
CBRE Group, Inc. (CBRE) operates as a commercial real estate services and investment company worldwide. It operates through Advisory Services, Global Workplace Solutions, and Real Estate Investments segments. The Advisory Services segment provides strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing; property sales and mortgage services under the CBRE Capital Markets brand; property and project management services, including construction management, marketing, building engineering, accounting, and financial services for owners of and investors in office, industrial, and retail properties; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. The Global Workplace Solutions segment offers facilities management, project management, and transaction management services. The Real Estate Investments segment provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; development services under the Trammell Crow Company brand primarily to users of and investors in commercial real estate; and flexible-space solutions under the CBRE Hana brand, which includes office suites, conference rooms and event space, and communal co-working space for institutional property owners. It also develops residential-led and mixed-use sites in London under the Telford Homes brand; and brokerage services for industrial projects, as well as investment property sales services to its existing appraisal services. The company was founded in 1906 and is headquartered in Los Angeles, California.
The upper panel of Chart 1 below plots CBRE daily since September 2020 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies. The lower panel displays a corresponding daily relative performance chart of CBRE versus the benchmark S&P 500 (SPX, blue) along with its 63-day moving average (green, quarterly, our Strategic time period).
Chart 1
The colored highlights in the upper panel show that CBRE appears to be resuming its Q4 2020 major uptrend, as defined by its 200-day MA, following back to back successful tests of the 50-day MA on Jan 5th and 29th. Meanwhile, CBRE’s current trend of quarterly relative outperformance versus SPX as shown in the lower panel also appears to be resuming following consecutive tests of it on those same dates. A sustained rise above the 50-day MA, currently situated at $63.37, would help to confirm this and would target an additional 12% rise to $74.20 per share.
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $63.63 area, a long entry price of $66.00 would provide a 1:3.5 risk/reward ratio (risking $1.00 to make $3.50) with an initial risk of 3.6%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.