Real estate stocks experienced an unpleasant downward ride in a generally downward-headed stock market in January 2005. Most of the companies represented in the new Inman News Real Estate Stocks Index posted lower valuations at month-end.
Wall Street hammered mortgage giants Fannie Mae and Freddie Mac as investors digested the earlier news that Fannie Mae will restate some of its prior financial results as Freddie Mac already has done.
Fannie Mae also announced the departure of yet another group of its senior executives, several of whom were shuffled from their jobs in the accounting department to outside advisor status. The company also halved its quarterly dividend and announced it would withhold its executives’ 2004 bonuses.
An MSN financial columnist added insult to the injury when he called Fannie a “train wreck moving in slow motion.” At month-end, Fannie and Freddie had each lost $6 per share, a drop of more than 9 percent for Fannie and more than 10 percent for Freddie.
Wall Street also frowned on IAC/InterActive Corp. in January. The company in late December announced a plan to split itself into two publicly traded companies: Expedia, which will comprise Expedia.com, Hotels.com and other IAC travel-related Web sites properties, and the separate IAC, which will include Ticketmaster, HSN, Citysearch, ServiceMagic and two online dating companies, among others. The LendingTree, RealEstate.com, GetSmart, iNest and Domania real estate Web sites will be part of the IAC entity. The still-combined company’s shares dropped nearly $2 or 7.3 percent in January.
Low-priced Homestore was hit with a 20 percent decline in its share price during the month. The company, which operates the Realtor.com Web site for the National Association of Realtors, may have suffered as a result of new indictments in connection with a stock fraud case. The company settled its own entanglements in the affair some time ago, but its name is still mentioned in the press in stories about the investigations.
The winners in the Inman Index in January were two corporations that managed to best the negative Dow Jones, S&P 500 and Nasdaq Composite. First American Financial and IndyMac Bancorp both posted gains of more than $2 per share or 6 percent of their value.
IndyMac benefited from positive financial results. The company reported net earnings of $55.9 million, or $0.87 per share, for the fourth quarter of 2004 and $170 million, or $2.74 per share, for the full year 2004. The company also announced the seventh consecutive increase in its quarterly dividend to $0.36 per share for the first quarter of 2005.
Disclaimer: The Inman Index is not intended to serve as investment advice.
Marcie Geffner is a real estate reporter in Los Angeles.
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