The Zacks Analyst Blog Highlights:Host Hotels & Resorts, FelCor Lodging Trust,Diamondrock Hospitality, Strategic Hotels & Resorts and National Oilwell Varco

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Oct 08, 2014, 09:30 ET

CHICAGO, Oct. 8, 2014 /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 Host Hotels & Resorts Inc. (NYSE:HST-Free Report), FelCor Lodging Trust Inc. (NYSE:FCH-Free Report), Diamondrock Hospitality Co. (NYSE:DRH-Free Report), Strategic Hotels & Resorts, Inc. (NYSE:BEE-Free Report) and National Oilwell Varco Inc. (NYSE:NOV-Free Report).

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

Here are highlights from Tuesday's Analyst Blog:

Host Hotels Enhances Portfolio with 3 Strategic Deals

Host Hotels & Resorts Inc. (NYSE:HST-Free Report) – the lodging real estate investment trust (REIT) – disclosed three transactions to accelerate its strategic capital-recycling program to improve its portfolio quality and strengthen its position in vibrant markets globally. In particular, the company acquired two assets and divested one.

Transaction Details

Host Hotels bought the b2 miami downtown hotel (with 242 rooms), positioned in the center of Miami's business and financial district, for $57.5 million. Alongside, the company penned a management contract with Destination Hotels & Resorts for refurbishing and reintroducing the property under a new independent identity later this year.

Furthermore, Host Hotels, through its European joint venture, bought a 90% ownership stake in a company that owns Grand Hotel Esplanade (394 rooms) in Berlin. The gross purchase price was €81.0 million. This property is situated in the western part of Berlin and is in proximity to several embassies.

On the other hand, in order to reduce its exposure to non-strategic markets, the company divested Tampa Marriott Waterside Hotel & Marina (719 rooms) for $199 million.

Our View

We believe both the abovementioned buyouts will strengthen Host Hotels' presence in the Downtown Miami region, which is looking to attract more people, and the flourishing premium markets of Germany. This will in turn boost the U.S. and European portfolio of Host Hotels. Additionally, Host Hotels' portfolio repositioning efforts amid improving U.S. lodging fundamentals and rising international travels is expected to drive RevPAR growth, going forward (read: Hotel Industry Enjoys Growth Trends).

We look forward to Host Hotels' third-quarter 2014 results that are scheduled to release on Oct 30, before the opening bell. The Zacks Consensus Estimate for third-quarter funds from operations (FFO) is currently pegged at 32 cents per share, depicting estimated year-over-year growth of 26.8%.

Host Hotels currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include FelCor Lodging Trust Inc. (NYSE:FCH-Free Report), Diamondrock Hospitality Co. (NYSE:DRH-Free Report) and Strategic Hotels & Resorts, Inc. (NYSE:BEE-Free Report). All three stocks carry a Zacks Rank #2 (Buy).

National Oilwell Varco Upped to Buy on Share Buyback

On Oct 4, Zacks Investment Research upgraded global large-cap energy equipment maker National Oilwell Varco Inc. (NYSE:NOV-Free Report) to a Zacks Rank #2 (Buy).

Why the Upgrade?

Last week, National Oilwell got an authorization from the board of directors to buy back common shares worth $3 billion. The share repurchase represents management's continuous aim to return capital to its stockholders.

National Oilwell has a strong business model which has been generating significant operating cash flows. The increased earnings are being used by the company for investment in strategic growth projects and also for returning capital to shareholders either through dividend or share buyback programs.

Moreover, National Oilwell is one of the biggest manufacturers of drilling equipment in the world. The company's large installed base of rigs worldwide provides for a steady recurring revenue stream through demand for maintenance, parts and other expendable products.

Additionally, the growing search for oil in new deepwater frontiers has significantly increased the demand for rigs capable of tackling the immense challenges of drilling in a mile or more of water. We believe that the company is well positioned to supply such technologically advanced production equipment. National Oilwell also has a strong balance sheet with a debt to capitalization ratio of 13%.

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

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