Target: a retailer and a REIT

Of course not. Ackman's charge that Target's share price is grossly undervalued is never more true than it has been this year. As retail sales have slowed down, Target's sales have gone down as well -- but its core real estate holdings are still what they were in mid-2008 (they've gotten larger to boot). Ackman figures that replacing Target's real estate would cost $40 billion, and that the $42.96 price (as of this afternoon) is just too low. The one constant in the economy is real estate: there is a finite supply.

Is Target really a REIT in disguise? It could certain be looked at like that. Target trades at a lower multiple than most REITs, and Ackman figures there is at least $39 per share in value not being realized in Target's share price. While most analysts look at sales and profit (and same-store sales), Ackman looks at the larger picture.

If you own Target shares, are you appalled by its share price? If you're not into TGT right now, would a long-term position be in your best interest once Ackman wakes the market up to this $30 billion bombshell more than in the past? One thing is certain: we can't build more land, and Target owns a whole bunch of it. Do the math.