Bluegreen's True Colors Shine Through

True to its name, there are two shades of color behind the Bluegreen (NYSE: BXG  ) story. Yesterday's fourth-quarter report showed generally flattish results, but it's a bit of feast and famine at the resort-building specialist.

Revenue climbed 6% higher for the period, to $126.9 million. Earnings shriveled to $0.06 a share, though Bluegreen would have earned $0.23 a share without a series of one-time charges. And that's in line with the $0.22 a share it had earned a year earlier.

So where is the tugging? Well, that comes from pitting its success as a timeshare business against its relative failure in pitching residential communities. During the quarter, the company's timeshare revenue soared 27% higher. Its homesite sales fell by 40% over the same three months.

There is no need to repeat the perils of real estate development in an era of oversupply. Thankfully, we don't have to judge Bluegreen based on how many homesteads it's selling in any given quarter.

Bluegreen Vacation Club is where the real story is. Timeshare sales accounted for 71% of last year's revenue at the company, up from the 65% slice it commanded in 2005.

Conventional players in this industry, like Sunterra and Wyndham's (NYSE: WYN  ) Trendwest Resorts, may not be household names, but major hoteliers like Marriott (NYSE: MAR  ) , Disney (NYSE: DIS  ) and Hilton (NYSE: HLT  ) have helped educate and legitimize the vacation interval market.

The difficult real estate market may even be playing into the industry's favor, with folks opting for cheaper timeshare purchases over costly second home purchases.

The market wasn't enamored with Bluegreen's report, however; it sent the stock 3% lower. Analysts were expecting a lot more out of the company, but I think it did just fine. It was a quarter that vindicated the timeshare business, and that's pretty much the only hue that matters at Bluegreen these days.

Check into some of these other timeshare properties:

• Destination clubs struggle through a notable bankruptcy.
• Maybe you can retire on the back of timeshare stocks.
• Timeshare stocks were singing the blues two years ago.

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Longtime Fool contributor Rick Munarriz almost bought a timeshare once, but wound up buying a condo by Disney World instead. He does own shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.