), a leading real estate investment trust (REIT) operating
self-storage facilities, touched a 52-week high of $158.55 on
Wednesday, Apr 10, 2013, as it gained momentum from
better-than-expected fourth-quarter 2012 results. The closing
price of this REIT on Apr 10, 2013 was $157.09, representing a
year-to-date return of 8.4%. The average trading volume over the
last 3 months was nearly 0.4 million shares.
Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock
has plenty of upside left given its strong estimate revisions
over the last 60 days.
Public Storage reported strong fourth-quarter 2012 results with
its FFO (funds from operations) per share substantially
surpassing the Zacks Consensus Estimate. We believe that the
company is well poised to maintain its growth curve backed by its
robust presence in all major U.S. markets.
It is the leading owner and operator of storage facilities in
the U.S. and has significantly increased the scale and scope of
its operations through the acquisition of Shurgard Storage
Centers that enjoys considerable presence in the European
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Public Storage also possesses a 41% common equity interest in
PS Business Parks Inc.
), which owns and operates commercial space, primarily flex,
multi-tenant office and industrial space. In addition, the
storage facilities of the company have high visibility and are
usually located in heavily populated areas that enhance the local
awareness of the brand.
This provides a significant upside potential to the company and
we expect the size and scope of its operations to enable it to
achieve economies of scale, thereby generating high operating
margins in the fourth quarter. However, the demand for storage
facilities has relatively lessened as customers have trimmed down
their discretionary spending, which remains our concern.
On Feb 21, Public Storage reported adjusted FFO of $1.86 per
share, well ahead of the Zacks Consensus Estimate of $1.76 per
share and prior-year quarter figure of $1.66 per share. For full
year 2012, Public Storage's adjusted FFO reached $6.68 per share,
exceeding the Zacks Consensus Estimate of $6.24 per share and the
prior-year figure of $5.93 per share.
The surge in FFO per share was primarily due to improved property
operations and impact of foreign currency translations. The
company also announced a 14% hike in its quarterly dividend rate.
Over the last 60 days, the Zacks Consensus Estimate for full-year
2013 moved up 1.0% to $7.15 per share with 9 out of 15 estimates
moving north. Also, the Zacks Consensus Estimate for full-year
2014 climbed 1.7% to $7.63 per share, driven by 5 positive
Of late, a number of REIT stocks achieved 52-week highs. These
Kimco Realty Corp.
Funds from operations, a widely accepted and reported measure
of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.