The Zacks Analyst Blog Highlights: Mosaic, PS Business Parks, Public Storage, Cousins Properties and CubeSmart

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Nov 12, 2013, 09:30 ET

CHICAGO, Nov. 12, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Mosaic Company (NYSE:MOS-Free Report), PS Business Parks Inc. (NYSE:PSB-Free Report), Public Storage (NYSE:PSA-Free Report), Cousins Properties Inc. (NYSE:CUZ-Free Report) and CubeSmart (NYSE:CUBE-Free Report).

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Here are highlights from Monday's Analyst Blog:

Mosaic Downed to Strong Sell

Zacks Investment Research downgraded The Mosaic Company (NYSE:MOS-Free Report) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

The Minnesota-based fertilizer maker had a lackluster third-quarter 2013, reported on Nov 5, with profit tumbling 70% year over year to $124 million (or 29 cents per share) from $417 million (or 98 cents per share) a year ago. The bottom line was hit by lower potash and phosphate pricing, cautious buyer behavior and a late fall application season in North America.

On an adjusted basis (excluding negative impact of 22 cents per share mainly resulting from the company's move to divest assets), Mosaic's earnings of 51 cents per share fell shy of the Zacks Consensus Estimate by a nickel.

Revenues fell roughly 28% year over year to $1,908.7 million, falling short of the Zacks Consensus Estimate of $2,071 million. Double-digit declines across phosphate and potash franchises on lower selling prices dragged down the top line. The company witnessed lower sales volumes in both businesses in the quarter.

Mosaic said that it will sell its salt operation and shutter a potash mine in Hersey, Mich. The company will also close underperforming distribution businesses in Argentina and Chile. While Mosaic envisions healthy demand in North America for the balance of 2013 based on excellent crop nutrient affordability, it expects a challenging pricing environment.

Following the third quarter earnings announcement, the Zacks Consensus Estimate for 2013 for Mosaic has gone down 4.4% to $3.02 per share. Similarly, the Zacks Consensus Estimate for 2014 fell 3.5% to $2.99.

PS Business Parks Buys Texas Assets

As part of its effort to enhance its share of flex space in the Valwood submarket of Dallas, Texas, PS Business Parks Inc. (NYSE:PSB-Free Report) acquired nine multi-tenant flex buildings. The company shelled out $12.4 million for the acquisition of these properties that span 245,000 square feet of space.

Currently 83.5% leased, these properties are advantageously located close to the parks, which are owned by the company and have an average tenant size of 6,400 square feet of space.

Moreover, earlier in the fourth quarter, PS Business Parks bought four multi-tenant flex parks with a 4-acre land parcel in Dallas, Texas. The assets, aggregating 559,000 square feet, were acquired for $27.9 million. The buyout included the purchase of 303,000 square feet of space in Valwood submarket, which made PS Business Parks the submarket's largest owner of flex space. Furthermore, the most recent acquisition enhanced the company's flex space in the Valwood submarket to 548,000 square feet.

PS Business Parks' portfolio in diversified markets enables it to tap opportunities and defuse operating risks associated with the economic down cycles. The company aims to capitalize on opportunities present in both existing and new high growth markets through accretive acquisitions. Therefore, we believe that the current acquisitions would help improve growth metrics, enabling the company to emerge stronger once the real estate markets fully recover.

Last month, PS Business Parks reported its third-quarter 2013 results with adjusted FFO (fund from operations) per share of $1.21, beating the Zacks Consensus Estimate by a penny and the year-ago quarter figure by 2 cents. An uptick in net operating income in Same Park as well as Non-Same Park facilities aided the results.

PS Business Parks, in which Public Storage (NYSE:PSA-Free Report) possesses a notable common equity interest, currently has a Zacks Rank #3 (Hold). Two other REIT stocks that are performing well and deserve a look are Cousins Properties Inc. (NYSE:CUZ-Free Report) and CubeSmart (NYSE:CUBE-Free Report), which carry a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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