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Aggressive Growth

CoreLogic, Inc. (CLGX - Snapshot Report) surprised by 8.3% in the second quarter, thanks to its continued cost containment and productivity initiatives, along with its aggressive share buyback activities. With five straight quarters of positive earnings surprises and an estimated long-term earnings upside of 20.4%, this Zacks #1 Rank (Strong Buy) information, analytics and business services provider looks like a solid growth pick.

Good Second Quarter

On July 23, 2012, CoreLogic reported second quarter net earnings of 39 cents, beating the Zacks Consensus Estimate of 36 cents. Results were up nearly ten fold from 4 cents in the prior-year quarter.

Revenue totaled $389.4 million, up nearly 19% year over year. The improvement came on the back of double-digit increases across all segments.

Increased revenues, cost reductions and productivity initiatives helped operating income soar 258.7% year over year to $67.6 million.

During the quarter, the Board of Directors doubled CLGX’s share repurchase authorization to 10 million shares for 2012.

Positive Earnings Estimate Revisions

For 2012, the Zacks Consensus Estimate is currently pegged at $1.29, up nearly 5.7% over the last 30 days as three of five estimates were revised upward. This also suggests a year-over-year increase of 41.3%.

For 2013, the Zacks Consensus Estimate of $1.43 improved 13.5% as all five estimates moved upward. The current estimate represents a year-over-year increase of 10.9%.

Stretched Valuation

Shares of CoreLogic are roughly trading at 18.7x the earnings estimate for 2012, a premium of 46.7% to the peer group average of 12.8x. On a price-to-book (P/B) basis, shares are trading at 2.0x, a premium of 11.3% to the peer group average of 1.8x. The PEG ratio is 0.92 times, marginally below the benchmark of 1 for a fairly priced stock.

CoreLogic has a trailing 12-month ROE of 8.9%, lower than the peer group average of 10.0%.

The price and consensus chart below shows that the earnings estimate lines for 2012 and 2013 are above the stock price, indicating that CoreLogic is undervalued.

Incorporated in 1894 and headquartered in Santa Ana, California, CoreLogic provides property, financial and consumer information, analytics, and services in the US. With a network of approximately 5,511 employees, the company offers these services to mortgage originators and servicers, financial institutions, government and government-sponsored enterprises, and other businesses.

With a market capitalization of $2.54 billion, CoreLogic competes with Lender Processing Services Inc. (LPS).

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