Author Topic: RLGY - Realogy  (Read 366 times)

ander

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RLGY - Realogy
« on: November 14, 2018, 11:10:23 AM »
Has anyone followed RLGY?
New CEO (Ryan Schneider) who did a great job running Capital One's Card business took over December '17. Double-digit FCF yield. Company is going to be focused on organic growth going forward versus the historic acquisition driven growth.

It's a business that Buffett likes, though they're not involved in the higher-priced NRT market as much.

Also, saw an idea posted on VIC which does a good job of highlighting the bull-case.
https://www.valueinvestorsclub.com/idea/REALOGY_HOLDINGS_CORP/7000725242


Spekulatius

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Re: RLGY - Realogy
« Reply #1 on: Today at 04:32:24 AM »
This is one of those companies that had a buyback mania at what turned out to be high valuations and now needs to fix their balance sheet. The business model is certainly changing slowly and I also believe thet based on my personal experience over the years, the total transaction costs are slowly moving down. 4.3x EV/EBITDA is Ok when your cash flows are very secure, but itís too high, if your cash flows are highly variable, IMO and your business model needs to be reinvested somewhat. I amd also looking at RDFN as a platform company and RMAX (direct RLGY competition, perhaps better managed) in this space.
To be a realist, one has to believe in miracles.

ander

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Re: RLGY - Realogy
« Reply #2 on: Today at 08:15:18 AM »
Thanks. Why do you think the cash flows are highly variable? They look to be relatively stable. Revenues are driven by existing home sales (which have been between ~4 mil and ~7 mil units) -- tends to trend up. Right now, ~5 mil units. The commission splits have gone up and are more in-line with industry now. I agreed that transaction pricing slowly moving down but not by much, but that's been small bps changes. It seems like previous CEO and exiting CFO were poor allocators. Looks like new CEO seems to be moving in the right direction.