Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

This Weeks Stock Pick - Investing In Real Estate Development Earnings Growth

|Includes: AIV, BXP, CBRE, CTO, EQR, FCH, HST, JLL, The St. Joe Company (JOE), MMI, RYN, SPG, VNO

Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service

The St. Joe Company (NYSE:JOE) is a real estate developer with more than 500,000 acres of land, concentrated primarily in Northwest Florida between Tallahassee and Destin.

Over the years, the company has developed successful residential and commercial projects and related infrastructure and is currently focused on growing its resorts, leisure and leasing operations.

JOE has five reportable operating segments: (1) residential real estate, (2) commercial real estate, (3) resorts, leisure and leasing operations, (4) forestry and (5) rural land. During Q3, about 50% of revenues came from resorts, leisure and leasing operations.

Solid Third Quarter Results

Joe reported its third quarter results on November 7, 2013. Net Income for the quarter came in at $4.2 million, or $0.05 per share, significantly ahead of the Zacks Consensus Estimate of $0.01 per share.

The resorts, leisure and leasing operations had a strong third quarter, with revenue up 30% from the same quarter of last year. Increased occupancy rates for JOE's vocational rental program and overall cost management led to the improvement in the bottom-line. However timber sales for the quarter were impacted by unusually high amounts of rain over to summer months.

In November, the company announced an agreement to sell approximately 382,834 acres of non-strategic timberland. According to the management "this transaction will help the company concentrate on its core business activity of real estate development in Northwest Florida. The proceeds from the sales will provide the company with significant liquidity and numerous opportunities to create long term value for our shareholders".

Earnings Estimates Revisions/Recommendation Upgrade

After the strong results, analysts have revised their estimates for JOE. Estimates for FY 2013 and FY 2014 are now $0.04 per share and $0.02 respectively, up from ($0.01) and $0.00 share, 60 days ago.

Zacks upgraded the recommendation on JOE to "Outperform" from "Neutral" following its better-than-expected quarterly results. Also, "the company's concerted efforts toward improving its bottom line by focusing on value enhancement of its resort communities, timberland sales and expense saving initiatives bode well going forward".

The Bottom Line

JOE is a Zacks Rank#1 (Strong Buy) stock. It also has a longer-term Zacks recommendation of "Outperform". Further improved outlook for resorts and leisure activities suggest strong chances of outperformance in the coming months.

Click Here to Review More Financial Intelligence