SL Green Realty Corp.
) hit a new 52-week high, touching $109.10 toward the end of the
trading session on May 12, as it gained momentum following robust
first-quarter 2014 results. The closing price of this real estate
investment trust (REIT) on May 12 was $108.95, representing a solid
year-to-date return of 19.1%. The trading volume for the session
was over 0.4 million shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy)
stock has plenty of upside left, given the improving company
fundamentals, strong estimate revisions over the last 30 days and
expected year-over-year funds from operations (FFO) growth of 13.1%
for the current year.
Riding high on the growth trajectory, SL Green came up with yet
another strong quarterly performance, driven by successful
execution of strategic initiatives and notable operating portfolio
performance. In particular, the company's efforts to tap
opportunities to boost its overall portfolio quality, through the
acquisition of premium assets and divestiture of non-core ones bode
well. Also, the company's debt and preferred portfolio investments
promise bright prospects.
On Apr 23, SL Green reported a positive earnings surprise of
11.6% for first-quarter 2014. In particular, the adjusted FFO of
$1.54 per share exceeded the Zacks Consensus Estimate by 16 cents
and the prior-year quarter figure by 37 cents. The 32%
year-over-year increase was driven by notable top-line growth and
strong portfolio enhancement activity. Also, SL Green raised its
2014 FFO per share guidance to the range of $5.90 to $5.96, up from
$5.62 to $5.72 guided earlier.
In addition, SL Green had a strong balance sheet position with
$447.2 million of cash and cash equivalents as of Mar 31, 2014, up
from $206.7 million at the end of 2013. Notably, the company has
recorded an average earnings surprise of 6.17% in the past four
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2014 FFO
per share climbed by 3% to $5.84 per share. Similarly, for 2015, it
moved north by 1.8% to $6.15 per share.
Other Stocks to Consider
Apart from SL Green, other REITs that reached 52-week highs on
May 12 include
Host Hotels & Resorts, Inc.
Essex Property Trust Inc.
General Growth Properties, Inc
). These companies reached 52-week highs of $21.75, $181.17 and
FFO, a widely used metric to gauge the performance of REITs,
are obtained after adding depreciation, amortization and other
non-cash expenses to net income.
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