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Zacks Industry Rank Analysis

Not surprisingly, the lingering effects of real estate’s calamity and the ensuing recession take time to dissipate in the minds of investors. Though ‘ground zero’ was subprime mortgage financing, every corner of the real estate industry felt the shockwaves. While specific niches rebounded first, more broad-based development companies are now seeing relief from downward pressures.

The 16 companies that represent the Real Estate Development sector of the Zacks Industry Rank ecosystem benefitted from this confidence boost, with 14 of these companies seeing upward revisions in their ranking this week. The industry now enjoys a spot at #94 out of 265 ranked industries. With companies in the industry averaging positive Earnings per Share (EPS) surprises of +25%, it shouldn’t be a surprise that people are reopening eyes that may have been shut in fear previously.

Below are two companies which have bumped up to Zacks Rank #2 (Buy) from a #3 (Hold) rating. Consensus brokerage estimates are pegging future prices well above their current prices. With an industry-wide swing, timing may be good to reevaluate these possibilities. Take into account individual company performance in a perspective with larger changes in investor sentiment industry-wide. That is a more durable way to build an investment strategy.

Look into the following companies specifically. It may be time for a good ‘ol fashioned land-grab!

St Joe Company (JOE - Analyst Report)

JOE was upgraded to a Zacks Rank #2 (Buy) last week from #3 (Hold).

St. Joe Company is one of the Southeast's largest real estate operating companies. St. Joe provides a broad range of real estate services to meet both residential and commercial real estate needs. The company is one of the few real estate operating companies to have assembled the range of real estate, financial, marketing and regulatory expertise to take a large-scale approach to real estate development and services. Their multi-pronged approach to investments, including residential, commercial and resorts, puts them in a unique position to benefit from industry wide positivity.

JOE’s last earnings surprise was a remarkable +400%. It reports its next earnings on February 27, 2014.

Altisource Residential Corp. (RESI - Snapshot Report)

RESI is a Zacks Rank #2 (Buy). It moved up from a Zacks Rank #3 (Hold) last week.  

Altisource Residential Corporation is engaged in the acquisition and ownership of single-family rental assets. Altisource Residential Corporation is based in Frederiksted, U.S. Virgin Islands for tax purposes. It acquires single-family properties through the purchase of distressed mortgage loan portfolios across the United States.  In other words, they are building a portfolio of U.S. residential real estate investments by acquiring foreclosed, empty homes, making a long-term play for profitability.

RESI pays a dividend of 3.28% and its last earnings surprise was +35.71%.

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Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%