(HF - Snapshot Report
) is seeing analysts
continue to push the next quarters' earnings estimates higher, and that helps make
the stock a Zacks #1 Rank (Strong Buy).
HFF, Inc. provides commercial real estate and capital markets services
to the commercial real estate industry.
Good Earnings Streak
HF is on a three quarter winning streak as far as positive earnings
surprises are concerned. Beats of $0.04, $0.21 and $0.07 respectively, served to
bolster investor confidence following two negative surprises.
In the most recent quarter, the company reported earnings of $0.29 per
share, topping the Zacks Consensus Earnings Estimate of $0.22 by $0.07.
The December 2010 quarter resulted in a negative earnings surprise, a
miss of $0.05. This makes the year ago comparison a favorable one for
Good news in the most recent quarter includes three deals from around
the country that closed. A $116.5M deal construction loan closed in
Arlington VA, and $90 million for a multi housing high rise in Chicago IL, hit
midway through the quarter. Earlier in the quarter, the company
announced the sale of an office tower in Ft. Lauderdale FL.
Recent Secondary Offering
On August 4, the company announced the pricing of a secondary offering
at $13.50 per share. The stock is trading about $2 lower since the
pricing, providing an attractive entry point. Cash of $116M as of the end of the third quarter of 2011 is up 90% from the year ago level of $61 million.
Shares of HF carry some interesting valuation metrics in comparison to the
broader industry. HF trades at a discounted forward PE of 9.7x compared
to 14x average for the industry. Its price to book, however, is at 3.2X
compared to 2.1x for the industry. The higher multiple for the
conservative measure of P/B is an indication that HF has stronger
fundamentals than other companies in its industry.
The recent strong pending home sales data does not hold a direct correlation to
the commercial real estate business, but an improvement in one is likely
to be a good sign for the other. This recent data point is another indication that things are looking up for HF.
HF holds a Zacks #1 Rank (Strong Buy), in part, due to consistent
earnings increases from analysts. The price and
consensus chart below shows that expectations continue to rise while the
stock has not budged from its recent range. At some point, the earnings
growth will be recognized by growth investors, many of whom are willing
to pay for steady growth.
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com.
is also the Editor in charge of the Zacks
Run Investor service