Why Realogy Holdings Corp. Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of real estate services specialist Realogy Holdings  (NYSE: RLGY  ) plunged 11% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has pulled back in 2014 on concerns over slowing growth, and today's first-quarter results -- net loss of $46 million on a revenue increase of just 5% -- coupled with a downbeat outlook only reinforce those worries. In fact, management said it sees challenging near-term comparisons due to continued weakness in mortgage refinance volume, forcing traders to recalibrate their valuation estimates accordingly.  

Now what: For the current quarter, management now expects homesale transaction volume in the range of -2% to +2% over the year-ago period. "As we have moved into our spring selling season, thus far the level of open activity we expected has not materialized, particularly as it relates to homesale transaction sides," noted CFO Anthony Hull in the company's earnings press release. "Having said that, we expect our aggregate number of homesale transaction sides to increase sequentially from 260,000 in the first quarter of 2014 to between 367,600 to 375,500 in the second quarter." Of course, with Realogy shares off more than 30% from their 52-week high and trading at a forward P/E in the midteens, much of that downbeat view might already be baked into the valuation. 

Will this stock be your next multi-bagger?
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2944240, ~/Articles/ArticleHandler.aspx, 7/22/2014 12:18:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement