The Zacks Analyst Blog Highlights:Hyatt Hotels, RLJ Lodging Trust, Starwood Hotels & Resorts Worldwide, Choice Hotels International and Sonic - KMPH FOX 26 | Central San Joaquin Valley News Source

The Zacks Analyst Blog Highlights:Hyatt Hotels, RLJ Lodging Trust, Starwood Hotels & Resorts Worldwide, Choice Hotels International and Sonic

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SOURCE Zacks Investment Research, Inc.

CHICAGO, Feb. 10, 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 Hyatt Hotels Corporation (NYSE:H-Free Report), RLJ Lodging Trust (NYSE:RLJ-Free Report), Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT-Free Report), Choice Hotels International Inc. (NYSE:CHH-Free Report) and Sonic Corp. (Nasdaq:SONC-Free Report).

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Here are highlights from Friday's Analyst Blog:

Hyatt Sells Portfolio to RLJ Lodging

Affiliates of Hyatt Hotels Corporation (NYSE:H-Free Report) have entered into an agreement with RLJ Lodging Trust (NYSE:RLJ-Free Report) as per which Hyatt will sell a portfolio of 10 hotels to RLJ. Subject to customary approvals, the transaction is expected to be completed in Mar 2014.

RLJ Lodging is a publicly traded real estate investment trust.  Post transaction, the trust's portfolio will include Hyatt, Hyatt Place and Hyatt House hotels comprising a total of 1,560 rooms. The Hyatt portfolio will take the total count of RLJ Lodging properties to 160 and also contribute to its EBITDA. The acquisition of these hotels will allow RLJ Lodging to expand its presence in the West Coast region, where these hotels are mainly located.

The asset sale forms a part of Hyatt Hotels' asset light strategy for greater financial flexibility and helps it to grow through management and licensing arrangements instead of direct ownership of real estate. A higher concentration of management and franchise fees reduces earnings volatility and provides a more stable growth profile.

Over the next two years, RLJ Lodging is expected to make capital expenditures worth $25.0 million across the Hyatt Portfolio. This will allow Hyatt to make the most of asset recycling while maintaining its long-term presence in key markets.

Another hotelier Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT-Free Report) has also benefited from a similar asset sale strategy. Recently, the company sold its St. Regis Bal Harbour Resort in Miami, Fla. for $213.0 million to Al Rayyan Tourism Investment Company.

Hyatt Hotels presently has a Zacks Rank #2 (Buy). Another hotelier Choice Hotels International Inc. (NYSE:CHH-Free Report) also looks attractive at current levels with a Zacks Rank #2.

More Sonic Drive-Ins for New York

In an attempt to grow business, several U.S.-based restaurateurs are focusing on unit expansion. The biggest chain of drive-in restaurants in the U.S., Sonic Corp. (Nasdaq:SONC-Free Report) is also following the same trend.

With the resurgence of consumer confidence, management accelerated its unit openings. In first-quarter fiscal 2014, the company unveiled six franchisees outlets, thus bringing the total number of restaurants to 3,517.

Sonic has recently signed a franchise development deal to extend its association with a long-standing franchisee partner, Fran DeSimone. Per the agreement, the company will set up 6 drive-ins at Syracuse and Watertown in New York by 2018.

Fran DeSimone boasts superior local market knowledge and a proven track record in the restaurant industry. In 2013, the company inked an agreement with the franchisee to develop 5 drive-in restaurants in Rochester, N.Y., first of which is slated for a late 2014 opening.

The Washington, OK-based company is aggressively expanding in states like New York to step beyond its core Central U.S. market. We believe the latest alliance reflects Sonic's intent to make New York one of the prime states for expansion considering its solid growth potential. In fact, to tap increasing demand in the Northern markets, Sonic has also unveiled drive-in prototypes that cater to market-specific needs.

The Zacks Rank #3 (Hold) company is gradually improving its business. The highlights of its first-quarter fiscal 2014 earnings, reported in Jan 2014, were positive comps momentum and margin expansion based on cost control measures. On the developmental front, it seeks to open 40 to 50 franchise drive-ins in fiscal 2014. The target is slightly higher than fiscal 2013.

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