CONE: A Time to Sell?

In April 2014, CONE traded below the -2 standard deviation threshold relative to its historical P/NAV spread to the US REIT sector. Since that time, the stock has outperformed the broader REIT sector along with the Data Center group as a whole.

In 1Q15, CONE breached the +2 standard deviation threshold relative to its historical P/NAV spread to the US REIT sector. Throughout the year, the stock has traded at or near these elevated levels relative to its brief trading history with the most recent signal surfacing yesterday.


CONE P/NAV Spread to Sector

Source: SNL   |    Powered by DISCERN

Source: SNL   |    Powered by DISCERN

With such a brief trading history, it’s difficult to determine the validity of such a signal. Based on the chart this year, it would appear CONE is in the process of or already has established a new relative trading range.

In the near-term, the stock has unsuccessfully tried to break out to new highs. The same can be said for the REIT sector as a whole. So without a fundamental catalyst, it appears CONE may continue to trade at or around these levels.

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