Post Properties (
The housing numbers yesterday may have looked fairly strong, but
the bulk of the growth seemed to come from multi-family/rental unit
type housing. This is no mistake; rent rates in the US are
near all-time highs and they have been on the rise for a couple
years now after the crash in 2009, as doubtful buyers move into a
flexible, easy rent regimen.
If you live in a major metro area in the US, you might notice
many more condos available to purchase than for rent. Those
rentals are usually carrying big premiums because of less rental
inventory and still unsure homebuyers. Post Properties
manages many mid- to high-end communities in different markets
across the US, and is reaping the benefits of the rental boom.
Post Properties is a REIT (real estate investment trust) that
focuses on providing resort-style garden apartments and
high-density urban apartments with an emphasis on resident service
and a strong brand identification. The operate assets across
the US in DC, Florida, Georgia, North Carolina, New York and Texas
in select cities.
Anecdotally, I can tell you that they not only have a prominent
brand presence in Dallas, but have shaped the city's neighborhoods
in a big way (for the better). They have a reputation for
quality in the city.
Post focuses most of their business on the Southern
They also sell homes under the Post Preferred Homes
division. The ability to develop new properties for sale or
to convert existing assets into upscale for-sale housing will give
them an edge as the housing market improves and more buyers
emerge. Given the recent rental boom, the company has been
winding down this division.
For the time being, rentals (price and occupancy) remain
strong. This trend recently prompted Cantor Fitzgerald to
start their coverage of Post as a Buy with a target of $50.
Keep in mind that cheap housing and expensive rent rates could
create a shift in the housing market, driving people away from
apartment living. For Post, their amenities and quality
should help retain renters, at least for the next few quarters and
until housing truly begins its recovery.
Financial Profile & Earnings
Post Properties is trading at about 20 times forward earnings.
As a REIT they are required to throw off 90% of their profits
in the form of dividends. Currently the company is yielding
about 2%. They have managed to positively surprise analysts for the
last four quarters at an average of almost 20%.
Throughout 2011 the company raised guidance by over 30%, which
was more than any apartment REIT. As of their most recent
quarter, they generated 78.61 million in revenue and reported
earnings of 52 cents a share. They are expected to make 52
cents this quarter and $2.20 for FY2012.
We are seeing strong upside magnitude in PPS, with the consensus
estimates for current and next quarter as well as FY2012 and FY2013
all moving higher over the past 3 months.
Analysts expect Post to grow earnings by 12-13% by the end of
the current fiscal year.
Slow and Steady Wins the Race
Post Properties has been growing steadily for the past two
years. The most recent pullback might offer investors an
advantageous entry for a long position. While capital
appreciation has been fairly stable in the stock, investors also
have a nice dividend while they ride the oscillations in the
PPS is just above its 50-day moving average of $43.29 which can
be viewed as near-term support. Below that is the 200-day
moving average of $40.84. PPS has managed to stay above both
of those levels for the past 18 months, falling below them during
sharp market pullbacks.
Post outpaced the S&P 500 by 17.53% over the past
year. It tends to have a little more volatility than your
This Week's Momentum Zacks Rank Buy Stocks:
Extra Space Storage Inc. (
Since we last mentioned EXR as a growth and income stock back in
June of 2011, it was trading right around $20. Back then the
company had delivered a strong earnings report, noting high
occupancy rates and other factors that encouraged them to raise
Flash forward 8 months and EXR is trading 36% higher and looking
more like a momentum stock. Let's not forget the fact that
Extra Space is still throwing off a 2.05% dividend as a bit of
icing on the cake. The question is whether the strength will
READ FULL STORY
Just a month ago, we first featured PBH as a value stock that was
worth looking into. In less than 30 days since that report
the stock has gained 20% in value, reported a strong quarter and
has built quite a bit of momentum behind it. The stock is
currently consolidating near its 52-week high and could be poised
for another leg up. Even with its recent run, Prestige Brands
is still fairly valued from an earnings perspective and is still a
Zacks Rank #1 Strong Buy.
As the market melts higher and investors look for stability
combined with growth, consumer staple stocks like PBH shouldn't be
ignored. Keep in mind that Prestige has a little more pep in its
step than a stock like Johnson & Johnson.
READ FULL STORY
O'Reilly Automotive (
It's not just gear-heads that love this Missouri-based auto parts
retailer; Wall Street has been driving this stock higher for the
past 8 months straight.
The good news is that O'Reilly continues to deliver
results. They beat EPS estimates last quarter and improved
margins throughout 2011. New car sales are improving, but
consumers are still finding value in their used vehicles and doing
minor repairs themselves. The DIY movement across the US
seems to be getting stronger as well.
But O'Reilly doesn't just cater to individuals; they deliver
parts to local shops around the country quickly, efficiently and at
competitive prices, which is a large part of their
The question is: can ORLY maintain this momentum into 2012?
READ FULL STORY
Landstar System Inc (
We all know UPS loves logistics. Like UPS, Landstar is a
supply chain, logistics and transportation expert for all sorts of
commercial needs. In contrast to UPS, Landstar integrates a
vast network of third party freight movers and systems to get
parcels from point A to point B quicker, smarter and hopefully
cheaper than their competitors.
For growing companies that need to move more of their goods
around the world, LSTR provides solutions to execute their
customers' logistical needs via air, rail, road and sea. They
can ship, store, track, economize and manage the entire supply
chain from beginning to end.
In a world that wants instant gratification, quick delivery and
full automation. Shipping companies like LSTR may have a very
bright future. Their stock is up 44% since October and could regain
momentum here if their positive earnings trajectory continues.
READ FULL STORY
NCR Corporation (
If you've been around the markets long enough, you may remember
this company as National Cash Register. Back in the 1800's,
they were in the business of making quality mechanical cash
registers that were cutting edge and helped merchants make
transactions more efficient.
In the new age, they have not only evolved to meet the current
needs of companies around the world, they have also thrived and
created a new image and mission, while sticking to their roots of
For a company that is over 125 years old, NCR may still have
some growth and momentum left in it. Recently, they reported
stellar financial results for the fourth quarter of 2011. NCR saw
revenue of $1.64 billion, which was a 17 percent jump from the
fourth quarter of 2010, on both an actual and a constant currency
basis. They reported strong cash flow growth, with operating
cash flow of $270 million and free cash flow of $229 million.
NCR may be an old dog with some new tricks yet to come.
READ FULL STORY
Jared A Levy is the Momentum Stock Strategist for Zacks.com. He
is also the Editor in charge of the market-beating
Zacks Whisper Trader Service.
POST PPTYS INC (
): Free Stock Analysis Report
To read this article on Zacks.com click here.