Earnings estimates for
) hit a new 52-week high on Jan 17, as earnings estimates for 2012
and 2013 have each advanced in the double digits over the past 90
days. This Zacks Rank #1 (Strong Buy) REIT reported its third
straight quarterly beat in October, and will be reporting again
exactly one week from today.
With a robust return of 31.1% in a year's time and a long-term
expected earnings growth rate of 5.0%, this stock looks like a
solid momentum pick.
Potlatch is scheduled to release its fourth-quarter 2012 earnings
on Jan 29. The Zacks Consensus Estimate is currently pegged at 31
cents per share, compared to a loss of 2 cents a year earlier.
Third-quarter earnings of 46 cents per share outpaced the Zacks
Consensus Estimate by 12.2%. The company has been experiencing
better-than-anticipated demand for manufactured wood products over
the past nine months.
Total consolidated revenues for the quarter came in at $151.9
million, down 0.6% year over year. Operating income moved down
18.9% to $28.8 million in the reported quarter. EBITDDA of $37.0
million was down 17.4%.
Earnings Momentum on an Upswing
Over the past 90 days, the Zacks Consensus Estimate for 2012
advanced 15.7% to $1.03. For 2013, the Zacks Consensus Estimate
moved north by 14.2% to $1.29 over the same time frame. These
estimates reflect year-over-year improvements of 0.3% for 2012 and
24.8% for 2013.
Potlatch currently trades at 33.0x 12-month forward earnings, a 16%
premium to the peer group average of 28.5x. Its price to book ratio
of 12.3 is at a significant premium to the peer group average of
3.8. Given its strong fundamentals, the premium valuation is
Furthermore, the company has a trailing 12-month ROE of 20.5%,
compared with the peer group average of 5.0%. This implies that the
company reinvests its earnings more efficiently than its peer
Potlatch has witnessed strong price momentum since the third
quarter earnings release. Moreover, the company has been
continuously outperforming its 200-day moving average over the past
six months. Over the past year, the return for the stock has been
31.1% compared with the S&P 500's return of 13.0%.
Headquartered in Spokane, Washington, Potlatch Corporation is a
Real Estate Investment Trust that is engaged in the ownership and
management of timberland in Arkansas, Idaho and Minnesota. Founded
in 1903, the company has a market cap of about $1.7 billion.
AmREIT, Inc. (
), Post Properties Inc. (
) and Redwood Trust, Inc. (
) are other Zacks #1 Rank stocks in the same industry.
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