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Bull of the Day: CoreLogic (CLGX)

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About the Company

CoreLogic is a provider of consumer, financial and property information and analytics related to real estate industry. Its clients include real estate companies, commercial banks, mortgage lenders and insurance companies.

The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services. CoreLogic has built databases for U.S. real estate, mortgage application, fraud, and loan performance and is also a provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. 

The company was earlier a part of First American and was spun off in 2010.

The company has three operating segments—Data & Analytics (39% of FY 2011 revenue), Mortgage Origination Services (37%) and Default Services (24%). Of late, the company has been working to shift the business mix towards data & analytics.

Updated Financial Guidance

On January 31, the company updated its financial guidance for 2012. The company now expects stronger results for 2012 (expected at the top of its previous guidance range) as a result of higher origination volumes, acceleration in data and analytics revenue growth and cost reduction programs as well as share repurchases.

CoreLogic also provided its initial guidance for 2013. The company expects earnings of $1.65 to $1.75 per share for 2013, implying a growth of 10-17%. . The results will be released on February 21, 2013.

Zacks consensus estimate now calls for earnings of $0.32 per share in the previous quarter and $0.43 per share in the current quarter. Further, Zacks Industry rank also looks attractive currently—70 out of 265.

S&P Upgrade

In November, S&P had upgraded its outlook on CoreLogic from positive to stable.  The upgrade was a result of expectation that the company will be able to maintain earnings stability through origination cycles and its moderate financial policies. The rating agency further stated that CoreLogic's leadership position in mortgage processing markets and focus on reducing costs will support consistent profitability,

The Bottom Line

I like the management’s plan for restructuring the business and reducing costs, which would create long term value for the company.

The company continues to benefit from the housing recovery and current mortgage refinancing boom.

While homebuilders have had an excellent run in the past few months or so and look somewhat overvalued at present, this company could be an excellent alternative play on the housing recovery.

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