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CB Richard Ellis Misses by a Penny – Analyst Blog

Zacks Market Commentaries — Thu, 29 Oct 2009 17:15:18 +0000

CB Richard Ellis Group Inc. (CBG) reported third quarter earnings of 4 cents a share. Excluding one-time charges, the company earned 8 cents per share which was a penny down from the Zacks Consensus Estimate of 9 cents. The company had earned 27 cents on an adjusted basis in the year-ago period.

CB Richard Ellis reported a net income of $12.4 million or 4 cents a share, down from income of $40.4 million or 19 cents a year earlier.

The credit market downturn and the economic recession have significantly impacted major investment sales and leasing markets globally. Increased unemployment levels coupled with store closures by retailers are significantly impacting the commercial real estate market and thereby impacting the company’s earnings.

However, the company is experiencing the benefits of the cost containments measures and remains right on track to achieve its goal of reducing annualized operating costs by $600 million.

Revenue for the quarter came in at $1.02 billion, down 21% year-over-year. The company operates through five segments: Americas , EMEA (Europe, Middle East and Africa ), Asia Pacific, Global Investment Management and Development Services.

Revenue for the Americas region decreased 21% year-over-year to $646.2 million. The EMEA’s region’s revenue was down 29% to $192.3 million. In the Asia Pacific region, revenues declined 7% from the prior-year quarter to $131.6 million.

The Global Investment Management segment, comprising investment management operations in the U.S. , Europe and Asia , reported a 17% drop in revenue to $32.9 million. The decline was driven by lower asset management, acquisition and incentive fees that had been achieved in the prior-year quarter. Assets under management totaled $34.9 billion at the end of the quarter, down 4% sequentially and 9% year-to-date.

Development Services segment, that includes real estate development and investment activities primarily in the U.S. , reported a 34% decline in revenues to $20.2 million.

The company reported a 19% year-over-year decrease in expenses to $969 million. Operating income was down 47% from the year-ago period to $57 million.

CB Richard Ellis Group Inc. is a commercial real estate services firm with full-service operations in metropolitan areas worldwide. The company offers a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate assets globally under the CB Richard Ellis brand name and provides development services under the Trammell Crow brand name.

The current market dislocations have resulted in newer opportunities for the company such as distressed assets marketing and service of failed commercial mortgage backed securities loan funds.

Though we remain encouraged with some early indications of stabilization and recovery of market conditions, we think that sales and leasing markets will remain stretched in the near term.
Read the full analyst report on "CBG"
Zacks Investment Research

Clayton Williams Energy Inc. (CWEI) is Focused on Producing Oil Domestically

QualityStocks — Tue, 14 Jul 2009 17:50:22 +0000

Clayton Williams Energy, Inc. is an independent exploration and production company focused on developing and producing oil and natural gas. The company operates primarily in Texas, Louisiana and New Mexico, and has extensive experience utilizing 3-D seismic and horizontal drilling. President and CEO Clayton W. Williams leads the company with more than a half a century [...]

Hawaiian Electric Disappoints – Analyst Blog

Zacks Market Commentaries — Tue, 05 May 2009 19:00:06 +0000

Hawaiian Electric Industries, Inc. (HE) reported $20.4 million, or $0.22 per diluted share ($0.23 basic), consolidated net income in the 1st quarter of 2009, compared to $34 million, or $0.41 per share (basic and diluted) in the year-ago quarter. Similarly, consolidated revenue of $543.8 million in the reported 1st quarter of 2009 was lower compared with revenue of $729.6 million in the 1st quarter of 2008.

Electric utility net income for the 1st quarter of 2009 was $14.1 million compared with $24.6 million in 2008. Lower net income was primarily due to lower electric sales and higher operations and maintenance expenses. Kilowatt-hour sales were down 7.4% in the reported compared with the year-ago quarter, impacting utility net income by an estimated $9 million. Sales were down mainly due to cooler, less humid weather and one less day of sales due to the leap year day in 2008.

O&M (Operations and Maintenance) expenses were up $9.4 million or 11.8% quarter-over-quarter. The increase in O&M expenses for the quarter was due primarily to $2.6 million higher maintenance expense, $2.5 million higher demand-side management costs, and $1.8 million higher planned production, transmission and distribution operations expenses and costs. Quarter-over-quarter depreciation expenses were higher by $1 million due to 2008 plant additions.

Bank net income was $10.9 million in the 1st quarter of 2009 compared to $14.6 million for the year-ago quarter. Net interest income in the 1st quarter of 2009 was $50.9 million, compared to $50.5 million in the 1st quarter of 2008. Lower interest expense, primarily due to lower borrowings and lower rates on deposits and borrowings, more than offset lower balances of mortgage-related securities and lower interest income on loans.

HE common stock trades at 12.1x and 8.1x, respectively, our 2009 and 2010 earnings per share estimates, or at a premium compared with its diversified energy utility industry peers. Meanwhile, the stock also trades at a discount on price-to-sales ratios, a slight discount to its peers relative to price-to-book value and price-to-sales multiples. Meanwhile, however, HE trades at the upper end of the range of relative cash flow multiples.

Although perfectly comparable public companies do not exist for HE, given the company's electric business and unique banking operations, the case for a market-neutral rating is supported by a high dividend yield and the existence of inconsistent market-based valuation parameters.

Given the company's established near-monopoly market position within the interest rate-sensitive utility and banking industries, the best investment case for HE may be the company's above-industry-average and very competitive 8.0% dividend yield, although we also recognize the existing risks associated with the outcome of regulatory disputes and adverse movement of yield curve.

Going forward, the HE story looks promising, with stable earnings from regulated electric operations, new plant installations and improved banking operations, which witnessed higher net interest income and margin. However, a volatile interest rate environment, a weakening Hawaiian economy due to the global recession and volatile financial market, and uncertainties prevailing over the sustainable strength of the Japanese economy collectively continue to weigh on the stock's valuation.

Therefore, with a mixed outlook and generally neutral valuation metrics, helped by a strong balance sheet and above-average dividend yield, we maintain our market-neutral HOLD recommendation on HE common stock with a six-month target price of $17.50, or 13.4x and 9.2x our 2009 and 2010 EPS estimates, respectively. Price appreciation to our near-term valuation target, coupled with the $0.31 per share quarterly cash dividend -- which represents relatively high projected earnings payouts, yet ought to be sustainable given the company's historical maintenance of the current dividend rate (if the company is able to deliver modest earnings growth) -- represents annualized total return potential of 35.8%.

Honolulu-based Hawaiian Electric Industries, Inc. is a holding company with subsidiaries engaged in electric utilities, banking, freight transportation, real estate development and other businesses, predominantly in Hawaii. The company also pursues the development of independent power projects in Asia and the Pacific.
Read the full analyst report on "HE"
Zacks Investment Research

Tejon Ranch a SoCal Land Play – Analyst Blog

Zacks Market Commentaries — Mon, 23 Mar 2009 20:28:59 +0000

Tejon Ranch Company (TRC) is a real estate development and agri-business company committed to responsibly utilizing its land and resources to meet the housing, employment, and lifestyle needs of Californians and create value for shareholders. The company's prime asset is approximately 270,000 acres of contiguous, largely undeveloped land that, at its most southerly border, is 60 miles north of Los Angeles. Tejon Ranch is the same size as Hong Kong and is 40% the size of Rhode Island.

The company's 3 major development projects are the Tejon Industrial Complex, Tejon Mountain Village and Centennial. As commercial, industrial and residential entitlements are pursued, the stock's valuation ought to expand.

We expect the value of land to significantly increase as further entitlement processes are completed, which involve state and county approval along with the expected subsequent law suits by environmental groups. As management succeeds in its vision of developing Tejon Ranch over the next 25 years, the valuation per acre should dramatically increase.
Read the full analyst report on "TRC"
Zacks Investment Research

China Unveils Plan to Bolster Real Estate, Ensure Growth

Contrarian Profits — Fri, 19 Dec 2008 14:47:58 +0000

pIn its latest effort to maintain an annual economic growth rate of 8%, China announced new plans to stimulate the country’s ailing real estate sector./p pBeijing said the new stimulus package will benefit 7.5 million low-income urban families and 2.4 million households located in the more remote countryside./p pChina pumped $387.5 billion into real estate development over the first 11 months of the year, up 22.7% from the same period in 2007. However, residential sales fell 18.8% year-over-year, despite the investment./p pBeijing is now trying to reignite the once red-hot real estate sector by implementing the following reforms:/p ul liOwners who have owned their home for two or more years can now sell it without paying business taxes./li liOwners previously had to wait five years before#8230;/li/ul

Housing Starts Tumble Again – Analyst Blog

Dirk Van Dijk — Tue, 16 Dec 2008 11:39:10 +0000

The following article discusses Pulte Homes, Inc. (PHM), D.R. Horton, Inc. (DHI), The Ryland Group, Inc. (RYL) and Beazer Homes USA, Inc. (BZH).

In November, both housing starts and permits fell to record lows. I consider this to be good news, since it represents a decline is misallocation of resources and means we might eventually work off some of the huge inventory overhang and some day see an end to the housing mess that is ground zero of the economic turmoil.

In the meantime, though, it means that economic growth will be even weaker in the fourth quarter than most are currently expecting. Building permits, the best indicator of future housing starts, fell to a seasonally adjusted annual rate of 616,000, a 15.6% decline from the 730,000 rate in October and 48.1% below the 1,187 million rate of a year ago.

All four regions of the country were down, both on a month-to-month basis and year over year, but clearly the West held up best. Permits there fell just 3.7% for the month and are down 43.6% year over year. Worst hit for the month was the Midwest, where the monthly decline was 22.1%, and the year-over-year decline was 46.9%. The all important South region fell 18.7% for the month and is down 50.3% year over year, while the Northeast posted drops of 14.7% and 49.2%.

From these numbers, it is very clear that there will be no rebound in housing starts as we enter the new year. Given the inventory overhang of both new and existing homes, and a very weak economic environment -- which is most likely causing negative housing formation (more people deciding to take on roommates or move back in with Mom than setting up their own place) -- I think that the permits levels are still way too high.

Housing starts tumbled 18.9% for the month, to a seasonally adjusted annual rate of 625,000 from 771,000 in October and 1,179,000 a year ago (-47.0%). Keep in mind that the housing slowdown has been going on for well over a year now, and that Housing starts stayed over 2 million a month for over a year at the peak.

The Northeast was hardest hit this month with a 34.6% decline, and down 60.2% on a year-over-year basis. The Midwest was the next worst, with a 23.1% decline for the month and a 55.5% year-over-year decline. The West was down 16.6% for the month and is down 47.5% for the year. The South, which is by far the biggest homebuilding region, posted a 15.9% decline for the month and is down 40.9% from a year ago.

The decline in permits and starts means that there will be more layoffs in the construction industry. To this point, housing completions have not fallen as far as starts, (down 22.8% year over year, and actually up 3.3% for the month).

Of course workers work on the house until it is completed; they are not laid off at the housing start. But clearly the pipeline is starting to empty out. For most of the last year, some of the laid-off workers in residential construction could find new work in commercial real estate development. However, that is about to follow residential construction -- over the cliff.

I honestly don't know why most of the big publically traded homebuilders are still in business. Firms like Pulte (PHM), D.R. Horton (DHI), Ryland (RYL) and Beazer (BZH) simply serve no useful economic purpose at this time. I would continue to avoid them until we see at least half of the names in the industry go into chapter seven liquidation.

Read the full analyst report on DHI

Read the full analyst report on RYL

"PHM" Free Stock Analysis: Buy? Sell? Hold?
"DHI" Free Stock Analysis: Buy? Sell? Hold?
"RYL" Free Stock Analysis: Buy? Sell? Hold?
"BZH" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Peak topsoil? Sounds “Cresy”, right?

Jason G. Wulterkens — Sat, 22 Nov 2008 05:36:13 +0000

The planet is facing a topsoil crisis, meaning that the greatest commodity of them all one day could be farmland. That potentially makes Cresud Inc. (NASDAQ: CRESY), which owns large swathes of farmland in Argentina and also has a growing presence in both Paraguay and Brazil, a sound long for punters. Additionally, [...]

EV Rental Cars (EVTP.OB) Continues to Grow Steadily with Strong Management Team

QualityStocks — Fri, 07 Nov 2008 17:25:21 +0000

Since December 1998, EV Rentals Cars (EVTP.OB) has continued to expand to meet the growing green trend. EV Rental is the only rental company in the United States that offers a fleet containing only environmentally-friendly hybrid-electric vehicles. Currently, the company has rental facilities at 8 major airports including San Francisco, Los Angeles, San Diego, Phoenix, [...]

Roger Wiegand: Oil to Reach New Highs by Year End

The Energy Report — Fri, 10 Oct 2008 01:21:44 +0000

Despite severe economic turmoil, demand for oil is rising significantly—in fact, it will land somewhere in the range of $150 to $157, according to Roger Wiegand, editor of Trader Tracks. In this exclusive interview with The Energy Report, Wiegand takes a close look at the untamed commodities bull and names some of his favorite buys. The [...]

Roger Wiegand: Predicting a “Severe Bull Market” for Gold

The Gold Report — Tue, 07 Oct 2008 21:35:08 +0000

Seeing beyond the blind curves of bailouts and meltdowns takes the keen vision of a veteran market observer, Roger Wiegand, Editor of Trader Tracks. In this exclusive interview with The Gold Report, Wiegand predicts a “severe bull market” for gold that will include both juniors and seniors. He advises selective buying and names several of [...]

Tejon Ranch a Strong Investment – Analyst Blog

Zacks Market Commentaries — Tue, 30 Sep 2008 16:23:48 +0000

Tejon Ranch Co. (TRC) is a real estate development and agri-business company committed to responsibly utilizing its land and resources to meet the housing, employment and lifestyle needs of Californians and create value for shareholders. The company's operations consist of land planning and entitlement, land development, commercial sales and leasing, leasing of land for mineral royalties, grazing leases, income portfolio management, and farming.

The company's prime asset is approximately 270,000 acres of contiguous, largely undeveloped land that, at its most southerly border, is 60 miles north of Los Angeles and, at its most northerly border, is 25 miles south of Bakersfield. Tejon Ranch is the same size as Hong Kong and is 40% the size of Rhode Island.

We expect the value of land to significantly increase as further entitlement processes are completed, which involve state and county approval along with the expected subsequent law suits by environmental groups. As management succeeds in its vision of developing Tejon Ranch over the next 25 years, the valuation per acre should dramatically increase.

Read the full analyst report on TRC

"TRC" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Star Resorts Development Inc. (SRDP.OB): Playing the Tourism Boom in Latin America

QualityStocks — Sat, 06 Sep 2008 02:18:56 +0000

Star Resorts Development (SRDP) is real estate development company focused on Latin American markets, particularly Argentina. The company specializes in tourism property for affluent travelers and owns a ski resort, Cerro Bayo Mountain Resort, as well as a 47-acre vineyard called Mendoza. Star Resorts Development’s partner in the Cerro Bayo project is already projecting a [...]

Comstock Homebuilding Companies Inc. (CHCI) Relieved of Foreclosure Pressures by Regions Bank

QualityStocks — Thu, 04 Sep 2008 19:51:40 +0000

Comstock Homebuilding Companies Inc. (Nasdaq: CHCI) functions as a diversified real estate development firm focused on affordable, residential products. The company builds and markets single-family homes, townhomes, mid-rise condominiums and more. The company today announced an agreement with Regions Bank regarding approximately $5.3 million of the company’s $144 million of secured debt as of June [...]