Just when you think that HouseValues
No guidance? Well, beyond guiding investors to expect less than the low end of the range it had provided back in May. In essence, this becomes the second time this year that the company backs off its year-end targets.
Looking back wasn't as painful. Earnings fell from $0.14 a share last year to $0.07 per share, or $0.11 a share before stock-based compensation expenses. That was better than the $0.06 per share that analysts had been expecting, even though revenue growth of 26% did come in a bit light.
I won't deny it. I walked away sorely unimpressed after trying the company's invasive namesake service. I think newer real estate sites such as Zillow, which are consumer-friendly instead of thinly veiled lead aggregators for real estate agents, like HouseValues.com -- have more potential in today's less naive marketplace.
I hated the stock when it sat in the mid-teens, but I may warm up to it here in the single digits. For starters, with $3.20 a share in cash, half of the company's market cap is a mattress of greenbacks.
My distaste for the company's flagship site is also offset by the potential of its newer endeavors. I believe that HouseValues' future lies more in its new sites, such as TheLoanPage and HomePages.com. Investors just need to make sure they are paying a fair price for this fixer-upper, and $6 and change sounds about right.
I think Tom Gardner misfired when he made the stock a Motley Fool Hidden Gems recommendation last fall. Thankfully, though, Tom hits more often than he misses. His picks have averaged gains of 23.4% while the market has appreciated to the tune of just 10%.
The downside is limited at this point for HouseValues, even if the catalysts for a turnaround appear to be nowhere in sight. This isn't a matter of slapping the company with the same stigma that smarting real estate developers are feeling. In fact, the glut of unsold homes sitting on the market is music to real estate enablers such as HouseValues, Move
As long as HouseValues is able to maintain its greenery beyond the funds earmarked for yesterday's announced share buyback, it will have the luxury of time to get its model right. Impatient investors have moved on. That's often the perfect climate for a jaded cynic to approach HouseValues as a dirt-cheap value stock in "move-in" condition.
Longtime Fool contributor Rick Munarriz isn't interested in selling his home, even as he recognizes that the once red-hot South Florida market is cooling off quickly. He does not own shares in any of the stocks mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.