Inc (RYN - Analyst Report)
be the best derivative play for the housing market recovery?
Description & Developments
seems to be ever increasing chatter about the housing
2012 is supposed to be the year the housing
not only stabilizes but begins to work its way higher. Of
course, folks have been saying this since
2009, but who’s counting?
reality is that housing prices are still dropping, but they are
than they have been. Inventories are
also coming down along with supply.
Homebuilders have throttled back their production and taken some
haircuts during the downturn. Rents
rates have gone through the roof and while condos and houses may still
vacancies, apartments are in demand and occupied.
got to give - Cheap mortgage rates, modestly improving economic picture
cheap housing should be good kindling for a fire under the bum of the
Jim Cramer is jumping on the bandwagon, recently recommending
Weyerhaeuser for the
Weyerhaeuser, Rayonier is a REIT that sells wood products.
Slightly different is the way Rayonier business
is split up into the following 3 categories:
As one of the largest private landowners in the U.S., we own, lease or
million acres of working forests in the U.S and New Zealand
timber to a wide variety of markets including pulp, paper, lumber,
energy production and other wood products.
Rayonier produces two types of high-quality Performance Fibers: cellulose
which are used in everything from filters and LCD screens to
and fluff pulp, which is used in disposable diapers and other absorbent
At Rayonier, we evaluate each acre of our timberland to determine its
potential and highest and best use. In some cases, land that was once
suited for growing timber is now more valuable for residential,
commercial or conservation use. Our real
estate subsidiary provides
added value by entitling or selling these properties.
we need to look beyond just building houses and as a derivative of the
recovery, RYN may be an interesting choice.
a solid mid-capper, Rayonier is trading a little over 20 times trailing
earnings (P/E). Generally REITs, which
throw of the bulk of their profits in dividends, tend to carry a
higher P/E and that number also tends to be steadier.
Rayonier is expected to earn $2.12 in FY2011
according to the Zacks Consensus Estimate.
a Zacks Rank 1, Rayonier isn’t a slouch. In their last report Rayonier
38.31% year over year growth on about 217.58 million in net
Rayonier is throwing off a quarterly dividend of $.40, with an annual
3.56%. Over the past 5 years, Rayonier
has averaged 4.51 percent in dividend yield.
not to say that the stock hasn’t had good price appreciate in addition
income. If Rayonier sees more income,
you can bet that div will rise. Over the
past 10 years Rayonier shareholders have gotten an average of over 17%
are for Rayonier to make 49 cents this quarter when they report on
Earnings estimates have fairly stable
over the past two months. 90 days ago we
had a small drop in consensus estimates, but in a housing market and an
global economy that is shaky, one might expect
surprised analysts to the upside by 31.48% last quarter, with an
surprise over the years of 13.84%
did get one analyst downgrade his current quarter estimate, but at the
time increase next year’s estimates higher.
That makes logical sense to me, so we shouldn’t view it as a net
Performance & Techincals
is currently trading just under its 52 week high of $45.65. Over the past year Rayonier has outpaced
S&P 500 by 18.78% and in the past 3 months alone has gained 7%
last month or so has been good to this stock, with shares up $5 or 12.5
since December 14th, 2011.
is firming in a bulling ascending channel, and firmly above its 50 and
moving averages, which is a bullish sign.
Volume has been dropping off as of late, so watch for lack of
here. Look for $44 as support and
perhaps a trigger for entry.
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MagicJack (CALL) - If you have an
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technology that lowers costs such as their MagicJack Plus
This could prove to add a positive surprise to their results at the end
A Levy is the Momentum Stock Strategist for Zacks.com. He is also the
charge of the market-beating Zacks