On Dec 2, we upgraded our long-term recommendation on
The St. Joe Company
) to Outperform from Neutral, following its better-than-expected
third-quarter 2013 results. Also, the company's concerted efforts
toward improving its bottom line by focusing on value enhancement
of its resort communities, timberland sales and expense saving
initiatives bode well going forward.
Why the Upgrade?
St. Joe's third-quarter 2013 earnings per share of 5 cents per
share beat the Zacks Consensus Estimate of 1 cent on the back of
lower expenses and improved revenues from its resorts, leisure
and leasing operations.
The company is currently focusing on its residential resort
communities, primary homes and the active adult residential
market. Recently, it announced expansion of its vacation rental
program and disclosed the launch of its private membership club,
St. Joe Club & Resorts.
Also, St. Joe is exploring potential opportunities to sell
timber land, rural land and/or related timber rights that are not
strategic to the company's core real estate development
activities, following interest from prospective buyers and
favorable timber market conditions. In relation to this,
following the quarter end, St. Joe inked a deal to sell around
382,834 acres of timberland for $565 million. We believe such
measures will continue to benefit the company in the quarters
ahead as well.
As a result, analysts became more positive on this stock which
currently has a Zacks Rank #1 (Strong Buy). This is evident from
the movement witnessed in the Zacks Consensus Estimate over the
past 30 days. For 2013, the estimate rose to 4 cents from the
prior projection of a loss of 1 cent per share. Also, the Zacks
Consensus Estimate for 2014 earnings per share rose to 2 cents
from a break even estimated earlier.
Other Stocks to Consider
Investors interested in the real estate industry may also
consider stocks like
E-House (China) Holdings Ltd.
Mitsubishi Estate Co., Ltd.
). While E-House (China) holds a Zacks Rank #1 (Strong Buy),
Gazit-Globe and Mitsubishi Estate carry a Zacks Rank #2
E-HOUSE CHINA (EJ): Free Stock Analysis
GAZIT GLOBE LTD (GZT): Get Free Report
ST JOE CO (JOE): Free Stock Analysis Report
MITSUBISHI ESTA (MITEY): Get Free Report
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