Three real estate-and-technology stocks, Homestore, HouseValues and ZipRealty, and mortgage sector giant Fannie Mae pushed the Inman News stock index higher in January.
Homestore, the top performer in the index last year, opened 2006 with a one-month gain of 16 percent from $5.21 to $6.04 per share. An analyst at Piper Jaffray, which is bullish on such Internet media/search companies as Google and Yahoo!, reportedly said smaller-cap companies in that sector, such as Homestore as well as CNET, RealNetworks and Jupitermedia, would report financial results inline with Wall Street’s expectations and thus experience a neutral reaction from investors.
HouseValues, which posted a 29 percent jump in its per-share price from $13.02 to $16.79, opened a new office in Yakima, Wash. Thirty-eight sales and customer service representatives reported for work on the first day at a facility that eventually could house as many as 650 employees, according to a local newspaper report. Local officials reportedly kicked in job and tax credit incentives worth $500,000 to lure HouseValues to the city.
ZipRealty announced an expansion of its operations in Florida to include Orlando and Tampa, two cities that are expected to experience very strong job growth this year. ZipRealty’s shares gained 17 percent from $8.34 to $9.81.
Fannie Mae achieved a 17 percent jump in its per-share price from $49.50 to $57.94, a gain of more than $8. The New York Stock Exchange agreed not to delist the mortgage corporation’s shares; regulators said their latest review of the company’s accounting practices revealed no additional new problems, although a Congressional panel will be convened to probe their report; and the company’s first-quarter 2006 dividend was set at the same amount, 26 cents per share, as the fourth-quarter 2005 dividend.
Friedman Billings Ramsey, an Arlington, Va., investment bank, slashed its target stock price for Fannie Mae and cut its recommendation on the company from “market perform” to “under-perform.” A number of other investment analysts still maintain “buy” and “hold” ratings on Fannie Mae.
Countrywide and Washington Mutual both suffered stock price declines while IndyMac countered that trend. Countrywide announced its fourth-quarter 2005 financial results Jan. 31. Net income increased from $370 million, or 61 cents per share, in the 2004 fourth quarter to $639 million, or $1.03 per share, in the 2005 fourth quarter. Analysts reportedly had predicted $1.05 and were disappointed.
Washington Mutual announced fourth-quarter net income of $865 million, or 85 cents per share, compared with $668 million, or 76 cents per share, in the prior-year quarter. The company’s $6.1 billion acquisition of credit-card issuer Providian Financial Corp. closed during the recent quarter.
The mortgage outfit said it will relocate as many as 4,500 more of its 60,000-plus U.S. jobs overseas in the next two years. Sixty-four call center jobs in Florence, S.C., for instance, will be moved to India, according to a local newspaper report.
DA Davidson analysts maintained a “neutral” rating on WaMu, reduced their forward-looking estimates for the company’s financial results and bumped up their target price, according to NewRatings.com.
IndyMac reported fourth-quarter profits of $72 million, or $1.09 per share, compared with $56 million, or 87 cents per share, in the prior-year fourth quarter. The company signed a deal with The Home Depot to originate loans for on-spec construction of new homes. The loans of up to $2 million will be offered to developers, builders and contractors, who also will receive a 5 percent rebate on purchases at The Home Depot stores.
The hypothetical Inman News index, comprised of 10 publicly traded real estate brokerage, mortgage and technology stocks, gained $14.33, or 4.7 percent, in January, a better performance than the Dow Jones Industrials, up 1.4 percent, the Standard and Poor’s 500, up more than 2.2 percent, and the Nasdaq Composite, up 4 percent. The Nasdaq Composite is more heavily weighted with technology stocks than the other two benchmarks are.
Marcie Geffner is a real estate reporter in Los Angeles.
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