RE:RE:RE:RE:Small Buybacks restarted & Short Report IncreaseVueConnect wrote: Entry into $6s.
Tech downdraft taking hold was timely to bring to this. Will it get to $4 or $5?
Still too soon to enter I think. Will wait for earnings on Jan 28th. Expecting to be a general shift back to value vs growth as interest rates rise. Has been a good lesson. Will not buy this back anytime soon.
So what was the effect of shares buybacks from $20s to $6s ? It relieved bagholders of their pain and slowed the impact of lower revenues.
Feel for anyone who fell for share buybacks and invested at $20, $17, $13, $9 etc.
As they said in the conference call:
"The decrease in diversified revenues was due to lower commercial, search, and capital markets revenue attributed to lower market volumes and our strategic decision to rationalize the service offering. We expect that the diversified title business will be fully rationalized by the end of the first quarter in fiscal 2022."
We can expect the revenues to turn aorund this year after the diversified title business is fully rationalized.
The best is yet to come and since they are already generating a lot of cash flow, they won't need money from the market to achieve it:
"We continue to execute on our plan with a long-term view of the business to triple our US Title refinance market share to 68% by the end of fiscal 2025 and achieve net revenue margins of 60% to 65% and adjusted EBITDA margins of 50% to 55%."
They are also working on developing a purchase title business:
"So, we, of course, continue to evolve that. We've been working with a few lenders that have been very focused on centralizing the purchase experience, as many of the overall process of that into a much more centralized play. So, we've been advancing those conversations, Martin, with a couple of the key lenders. We're feeling very good about the evolution of the design of how that would work. And so, our goal this year is to get out and actually pilot something in the purchase title space. So, I think we're on track to do that, feeling very optimistic about the design that we're putting around that."
Shares are trading at 9x 2021 EBITDA and 13x 2021 Cashflows, 1x Revenue, PE Ratio of 13, so that's all pretty cheap valuation for a company that should double within four years. They have zero debt. On a value basis, it's a cheap stock. Even better time now for them to be buying shares back on the cheap.