Eight of the 10 housing and mortgage-related stocks that make up the hypothetical Inman Index out-classed the broader market indices in September.
The eight — Countrywide Financial, Fannie Mae, Freddie Mac, Realogy, Homestore, IndyMac, Washington Mutual and ZipRealty — all finished the month ahead of the Nasdaq Composite, which was up 3 percent, and the Dow Jones Industrials and Standard & Poor’s 500, which each gained 1.9 percent.
Interactive Corp., which operates the LendingTree and RealEstate.com Web sites, among other properties, also was in the plus column in September, although with a gain of less than 1 percent.
HouseValues dropped 2.5 percent over the period and was the only issue in the Inman Index that closed the month in the minus column.
The top performer was ZipRealty, which was up from $6.02 to $7.36, a gain of more than 22 percent. The company early in the month welcomed new CEO Richard Sommer to the helm. Sommer previously was CEO of HomeGain, which was purchased by Classified Ventures last year. Before that, he held senior executive positions at IndyMac Bank and Realtor.com, a division of Move Inc.
A story in financial-markets tracker Red Herring noted that “things have been slowly looking up” at ZipRealty and that the online brokerage “now provides property sales histories, information on price reductions and local school and neighborhood data” and “invites customers to comment on houses they’ve visited.”
Shares of Move, another of the smaller technology-related issues in the Inman Index, were up from $4.54 to $4.91, a September gain of more than 8 percent.
An analyst at Caris & Co. reiterated a 3/average rating on Move with a target price of $5.50, according to a research note reported on Seeking Alpha. The analyst suggested that strategic changes at Move could cause disruption for customers and advertisers in the short term, but pay off over the long term.
Several larger companies within the Inman Index also did well in September: Fannie Mae gained 7.2 percent, IndyMac added 6.7 percent, and Realogy was up 6.5 percent.
Fannie Mae and Freddie Mac have been the subject of legislation pending in Congress that would strengthen federal regulatory authority over the two corporations and perhaps limit the size of their mortgage-loan portfolios. Two MarketWatch stories reported on speculation among investors over the extent of Fannie Mae’s exposure to sub-prime mortgages in its portfolio and the possible consequences of government-imposed restriction on the portfolio. News reports suggested that forward progress on the legislation is unlikely to occur before the November elections.
IndyMac reiterated its 2006 earnings forecast of $5 to $5.40 per share and added office space and employees to its operations in Rancho Cordova, east of Sacramento, Calif., and Quincy, south of Boston, according to local news reports. The banking corporation also signed a new five-year contract with chairman and CEO Michael Perry, who joined IndyMac in 1993. Perry’s new package includes annual incentive compensation tied to the company’s earnings performance.
Realogy, the Cendant Corp. spin-off that began trading Aug. 1, received a nod in Forbes from John W. Rogers Jr., CEO of Ariel Capital Management in Chicago. Rogers expects the company to face a bumpy road in the near term, but likes Realogy’s prospects further out. “As a patient investor, I am always looking long term. The new company changes hands at a 39 percent discount to my $33 estimate of private market value,” he wrote.
The Inman Index overall bested the broader market indices in September with a gain of 5 percent.
Marcie Geffner is a real estate reporter in Los Angeles.
Copyright Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.
