While everyone loves to hate real estate these days, Move, Inc. (Nasdaq:MOVE) continues to rebuild itself during this industry crisis. The national leader of online real estate websites links real estate sales professionals with the largest pool of information on new home and rental listings. Despite a tough environment, the company in 2009 concluded a year of significant operational changes.
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Out of Crisis Comes Opportunity
Move, Inc., under the leader of Steve Berkowitz, has used the turmoil in the real estate industry to further position the company as the dominant online real estate services company. The first significant change was the signing on of Berkowitz who comes with a background having worked for Microsoft (Nasdaq:MSFT) and Ask.com. It was Berkowitz who took online search engine Ask Jeeves out of its distressed state and orchestrated a $1.85 billion sale of the company to media giant InterActive Corp. (Nasdaq:IACI). His excellent turnaround experience with Ask Jeeves should benefit Move, Inc. very well. (For more, check out Turnaround Stocks: U-Turn To High Returns.)
In addition, Berkowitz has brought in a quality management team made up experienced online executives with backgrounds from companies like eBay (Nasdaq:EBAY), and Ticketmaster. In addition to maintaining its market leadership, with over 8.9 million unique visitors per month, the launch of the new Realtor.com iPhone app led to over 300,000 downloads in 50 days.
Moving Takes Time
In the 2009 fourth quarter, Move, Inc. earned $50 million in revenue, versus $57.5 million in the 2008 same quarter. Net loss from operations in the fourth quarter of 2009 was $4.5 million, versus a loss of $3.2 million in the comparable 2008 quarter. For the year, the company lost $12 million, against a loss of $34 million in 2008. Mr. Berkowitz clearly has his work cut out for him, but his efforts appear to be coming to fruition. Turnarounds are not easy, but they're even worse when you are faced with the severe headwinds that exist in real estate today.
Yet, in the past year, Berkowitz has taken operating cash flows from $1.5 million in 2008 to $7.8 million in 2009. At $2 a share, the company is valued at $300 million against equity of $74 million. Despite this, the company is being neglected for its obvious association with real estate. However, the gem here is Berkowitz and his track record at turnarounds, notably with online site Ask Jeeves. Despite the quarterly numbers, shares were up over 11% on the earnings news. Continued success with the operational turnaround will likely attract more attention to the stock.
Compared with closest competitor Primedia Inc. (NYSE:PRM), Move has a significantly stronger balance sheet with no net debt. In fact, Primedia debt gives the company a negative tangible book value. Plus, Move now has an excellent CEO who can leverage the company's market leading position.
The Bottom Line
Of course, as the real estate environment improves, the headwinds facing the company should ease up, further propelling management's efforts. Add this all up and Move, Inc. is heading in the right direction. (For more, check out Removing The Barriers To Successful Investing.)