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Realogy: Whether Wall Street Has Worked Out The Coming Real Estate Renaissance


  • Based on synthesizing lots of market information, I am betting on a 'Real Estate Renaissance', and Realogy is among the best ways to play it.
  • Realogy owns marque real estate brokerage brands including: Century 21, Coldwell Banker, ERA, Sotheby's, and Better Homes brands.
  • COVID-19 will create a catalyst for people to move from cities to the suburbs and grandparents to move closer to children and grandchildren.
  • Looking for more stock ideas like this one? Get them exclusively at Second Wind Capital . Get started today »

Today, I decided to share one of my Fab 5 ideas that I have kept under wraps since May 23, 2020. The company is Realogy Holdings Corp. (RLGY). I started buying it on May 26th and the more work I did, the higher my conviction level got. My current conviction level is pretty high and I think the move is just getting starting as Wall Street isn't paying attention, at least not yet.

Source: Snapshot of my long position and cost basis in RLGY shares

Moreover, since I still think there will be another big leg up, I decided it was better to share with the broader SA audience. My thought process for sharing is simple, I worked this idea out well before Wall Street, similar to my United Natural Foods (UNFI) thesis, so I don't want to read headlines or watch a CNBC interview where some sell sider shares his/her 'Real Estate Renaissance' thesis and RLGY is then $10 per share. In the interest of not having my thunder stolen, I am sharing my current best idea with the broader SA audience.

Before we dive in, I want to share some context and my investment process. Since late March 2020, I have been actively looking for compelling new waves to surf as COVID-19 has changed everything. Fast forward to late May 2020 and the first derivative stuff has already caught a big bid. From an investing standpoint that is yesterday's news.

Think camping companies like Thor Industries (THO), Camping World Holdings, Inc. (CWH), or deck company Trex Company (TREX), or lawn and garden companies like Scotts Miracle-Gro Company (SMG), and Central Garden & Pet Company (CENT). I am just naming a few.

Source: Yahoo Finance

My point is that as a value investor, I don't fall into the trap of

Second Wind Capital is a catalyst driven/ trading oriented service with an underpinning tied to value and out of favor sectors. The hold period can range from a few days to up to six months (sometimes longer if my conviction level for a particular thesis is elevated and fundamentally and tangibly intact). Risk management perimeters will be set based on position sizing and/or stop losses. No one bats a thousand, so if you can get it right 51% of the time and you manage your risk, you will generate out-sized returns. Join now with a 2-week free trial and follow my real-time portfolio.

This article was written by

Idea generation, value investing, small caps and under the radar stocks.
A career wanderer and journeyman, with a passion for deep value and contrarian investing. I spent five years on the buy side in investment grade bonds on a team that managed $50 billion of assets, 3.5 years as an energy credit analyst for an energy company, and had multiple stints in corporate finance, most recently as a strategic financial analyst. I have an undergraduate degree in Finance (UMass Amherst) and earned an MBA (Babson College).

I actively invest my own capital and for a few family members.

Favorite quotes:

“When you are inspired by some great purpose, some extraordinary project, all your thoughts break their bonds: Your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great and wonderful world. Dormant forces, faculties and talents become alive, and you discover yourself to be a greater person by far than you ever dreamed yourself to be.” (Author - Patanjali)

“Tentative efforts lead to tentative outcomes. Therefore, give yourself fully to your endeavors. Decide to construct your character through excellent actions and determine to pay the price of a worthy goal. The trials you encounter will introduce you to your strengths. Remain steadfast...and one day you will build something that endures: something worthy of your potential.” (Author - Epictetus)

"Hope sees the invisible, feels the intangible, and achieves the impossible." (Author - Unknown)

"When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left, and could say, 'I used everything you gave me." (Author - Erma Bombeck)

Analyst’s Disclosure: I am/we are long RLGY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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