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Move, AŞ Message Board

  • born2win_2000 born2win_2000 Nov 4, 2008 8:36 PM Flag

    BUY! BUY! BUY!

    MOVE has become a deep value stock.

    Smartmoney is quietly back up the truck and loading up before others discover this gem. The new redesign will likely grow 2009 top line in the mid-teens.

    Do your own research before investing money

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    • After 10 years, the site still struggles. The elimination of the unprofitable Welcome Wagon segment is the final piece of the non-technology side of the business that was acquired in the boom years prior to the 02 market meltdown. Long and company were brought in to effect a turnaround, but that is long since over. The final step is the assertion that once Welcome Wagon is fully accounted for, that they will have a stable and profitable base on which to grow. The more curious aspect of this is why they held onto Welcome Wagon for five years, which inflated their sales, but deflated their profits. Apparently, they concluded that the psychology of the bear market made it more acceptable to bite this bullet, and then begin again with a sales basis of $240 million. However, the company is heavily diluted with far too many outstanding shares given its sales. Salaries, further, are high, given that you don't generally pay people over $4 million to run $240 million businesses. Certainly, the business lacks dynamics. Other than focus on the niche it is in, it seems to have no flair for new products or services, so that it has little to offer that would excite or interest investors.

      If the stable basis is now around $1.30 to $1.40, factoring in the Welcome Wagon closure, then it would seem that the company could, once this is behind it, one would expect to see a better profit picture emerge, and, assuming no significant new technology investments are at hand, the profit picture should improve. Which, in turn, should help the stock.

    • How so?

      New website is just a web 2.0 version of the old fact the old version had better search capability.

      All other big real estate companies are participating in IDX program and therefore carry all listings even if not listed by their company...they have more marketing dollars to advertise their own websites (e.g. Remax etc)

      Move/Realtor makes money by charging agent extra for enhancing their a way that is self defeating in that I charge you more to put additional pictures on therefore most opt not to as a consumer I rather go to the company website to see the extra pictures.

      These guys are controlled by the National Realtors Body and by necessity are bloated...can somebody explain the huge SGA expense (40 million dollars) ....for a website?

      They do have a strong balance sheet (thanks do dollars from Elevation partners)...but do keep in mind that $130 million is in Auction Bonds which currently has no market ...therefore the actual value is anywhere between 0 to 130 million ....they have moved this from short term investments to long term

      Assuming a decent is no cheaper than many other stocks in the market.

      Wanting to hear all counter-opinions...please back those with facts and reason.


      • 1 Reply to m.latem
      • my two cents.

        1.)i have no idea how superior this website is relative to the former version as i just started my DD this past weekend.
        2.) i'm very interested in a continued expansion in relevant metrics. For example, 8% increase in user engagment, 63% increase in printed listings, 21% increase in listings emailed to friends, 35% increase in unique visitors registered, 2/3 of vistors plan on participating in real estate market within one year......I'm interested in this because i believe the company benefits tremendously from the network effect. The more viewers, the more likely agents post more listings with more enhanced features, which in turn attracts more viewers. Moreover, i believe that the average consumer will enter the real estate market with great caution (this has been the case with almost any bubble), and will therefore require much more information before they purchase. this should speed the migration of listings from newspapers to the internet, which is a much more interactive medium. Ultimately, i believe over time move/realtor can create a brand that increases its moat.
        3.) There have only been insider purchases this year. In fact, nierenberg managment, a top value/small cap fund, recently bought more than 10% of the company at prices much higher than the current quote. Eric Semler, another well-respected Telecom and Media investor who runs a very focused fund, also owns (i believe as of february) over 10% of MOVE. You're in good company.
        4.) You simply cannot value their acution rate securities at zero. I don't have the data in front of me, but comparable ARS's have recently sold at a 25% discount to par. My bet is that they get par, but i'm being conservative using 90 million in my estimates (>-30%). I personally believe valuing the ARS's at 0 is not conservative, it's ridiculous. So by my estimate they have 135.7 million in cash and cash-like securities. This translates into about 90cent per share. Let's take that out of the price as of today's closing of 1.45--they are, after all, cashflow postive in operations. that leaves you with 55 cents/share and enterprise value of 83 million. Let's use the lowest amount of revenue in the past 9 years: 216 million. that gives us a EV/S of .38 conservatively. using 2008 estimates for rev you get an EV/S of .33. You'd be hard-pressed to find a market leader that is gaining market share with an unlevered EV/s of .33
        5.) This is conjecture. but they have huge amounts of NOL's that you can read about in their 10k. I'm not an accountant and i don't have a definitive answer to this, but it might be possible for a large company to buy them for their NOL's. The tax benefit would more than pay for the company. If i were to guess i would tell you i'm likely not reading into this correctly, but i'm throwing it out there to see if someone more knowledeable can explain the matter.

        I am long these shares at a price a little higher than today's close. I am planning to add to my (small) position if it goes down further and if my research continues to confirm my bias.

        anyway, much longer than i intended. I'd love to hear more input from the message board.