Post Properties (PPS)
The housing numbers yesterday may
have looked fairly
strong, but the bulk of the growth seemed to come from
type housing. This is no mistake; rent rates in the US are
highs and they have been on the rise for a couple years now after the
2009, as doubtful buyers move into a flexible, easy rent regimen.
If you live in a major metro area in
the US, you might
notice many more condos available to purchase than for rent.
rentals are usually carrying big premiums because of less rental
still unsure homebuyers. Post Properties manages many mid- to
communities in different markets across the US, and is reaping the
the rental boom.
Post Properties is a REIT (real estate investment trust) that focuses
providing resort-style garden apartments and high-density urban
an emphasis on resident service and a strong brand
operate assets across the US in DC, Florida, Georgia, North Carolina,
and Texas in select cities.
Anecdotally, I can tell you that they
not only have a
prominent brand presence in Dallas, but have shaped the city’s
a big way (for the better). They have a reputation for
quality in the
Post focuses most of their business
on the Southern
They also sell homes under the Post
division. The ability to develop new properties for sale or
existing assets into upscale for-sale housing will give them an edge as
housing market improves and more buyers emerge. Given the
boom, the company has been winding down this division.
For the time being, rentals (price
and occupancy) remain
strong. This trend recently prompted Cantor Fitzgerald to
coverage of Post as a Buy with a target of $50. Keep in mind
housing and expensive rent rates could create a shift in the housing
driving people away from apartment living. For Post, their
quality should help retain renters, at least for the next few quarters
until housing truly begins its recovery.
Profile & Earnings
Post Properties is trading at about 20 times forward earnings.
As a REIT
they are required to throw off 90% of their profits in the form of
dividends. Currently the company is yielding about 2%. They
to positively surprise analysts for the last four quarters at an
Throughout 2011 the company raised
guidance by over 30%,
which was more than any apartment REIT. As of their most
they generated 78.61 million in revenue and reported earnings of 52
share. They are expected to make 52 cents this quarter and
We are seeing strong upside magnitude
in PPS, with the
consensus estimates for current and next quarter as well as FY2012 and
all moving higher over the past 3 months.
Analysts expect Post to grow earnings
by 12-13% by the
end of the current fiscal year.
and Steady Wins the Race
Post Properties has been growing steadily for the past two
most recent pullback might offer investors an advantageous entry for a
position. While capital appreciation has been fairly stable
in the stock,
investors also have a nice dividend while they ride the oscillations in
PPS is just above its 50-day moving
average of $43.29
which can be viewed as near-term support. Below that is the
moving average of $40.84. PPS has managed to stay above both
levels for the past 18 months, falling below them during sharp market
Post outpaced the S&P 500 by
17.53% over the past
year. It tends to have a little more volatility than your
Momentum Zacks Rank Buy Stocks:
Space Storage Inc. (EXR)
Since we last mentioned EXR as a growth and income stock back in June
it was trading right around $20. Back then the company had
strong earnings report, noting high occupancy rates and other factors
encouraged them to raise FY2011 guidance.
Flash forward 8 months and EXR is
trading 36% higher and
looking more like a momentum stock. Let’s not forget the fact
Space is still throwing off a 2.05% dividend as a bit of icing on the
cake. The question is whether the strength will continue?
Just a month ago, we first featured PBH as a value stock that was worth
into. In less than 30 days since that report the stock has
gained 20% in
value, reported a strong quarter and has built quite a bit of momentum
it. The stock is currently consolidating near its 52-week
high and could
be poised for another leg up. Even with its recent run,
is still fairly valued from an earnings perspective and is still a
#1 Strong Buy.
As the market melts higher and
investors look for
stability combined with growth, consumer staple stocks like PBH
ignored. Keep in mind that Prestige has a little more pep in its step
stock like Johnson & Johnson.
It’s not just gear-heads that love this Missouri-based auto parts
Wall Street has been driving this stock higher for the past 8 months
The good news is that O’Reilly
continues to deliver
results. They beat EPS estimates last quarter and improved
throughout 2011. New car sales are improving, but consumers
finding value in their used vehicles and doing minor repairs
The DIY movement across the US seems to be getting stronger as well.
But O’Reilly doesn’t just cater to
deliver parts to local shops around the country quickly, efficiently
and at competitive
prices, which is a large part of their business.
The question is: can ORLY maintain
this momentum into
System Inc (LSTR)
We all know UPS loves logistics. Like UPS, Landstar
is a supply
chain, logistics and transportation expert for all sorts of commercial
needs. In contrast to UPS, Landstar integrates a vast network
party freight movers and systems to get parcels from point A to point B
quicker, smarter and hopefully cheaper than their competitors.
For growing companies that need to
move more of their
goods around the world, LSTR provides solutions to execute their
logistical needs via air, rail, road and sea. They can ship,
track, economize and manage the entire supply chain from beginning to
In a world that wants instant
gratification, quick delivery
and full automation. Shipping companies like LSTR may have a
future. Their stock is up 44% since October and could regain momentum
their positive earnings trajectory continues.
If you’ve been around the markets long enough, you may remember this
National Cash Register. Back in the 1800’s, they were in the
making quality mechanical cash registers that were cutting edge and
merchants make transactions more efficient.
In the new age, they have not only
evolved to meet the
current needs of companies around the world, they have also thrived and
a new image and mission, while sticking to their roots of
For a company that is over 125 years
old, NCR may still
have some growth and momentum left in it. Recently, they reported
results for the fourth quarter of 2011. NCR saw revenue of $1.64
was a 17 percent jump from the fourth quarter of 2010, on both an
actual and a
constant currency basis. They reported strong cash flow
operating cash flow of $270 million and free cash flow of $229 million.
NCR may be an old dog with some new
tricks yet to come.
A Levy is the Momentum Stock Strategist for
Zacks.com. He is also the Editor in charge of the market-beating Zacks