Marcus & Millichap (MMI)

This is a small commercial property agency. It has had a precipitous drop. Goldman has changed their call from sell to neutral. I presume the caution is over interest rates and growth after recent results which seriously disappointed the market. It has some nice figures and the fall looks way overdone to me but if anyone has a view, value compelling or value trap?

I have a holding in MMI.

I thought you hated stocks below the 200 dma and this one crashed through with HIGH volume.

IBD says the composite is 91 and SMR is an “A” - both good, but composite is not superstrong. I don’t have a subscription so can find the RS, which I know is important to you. Too hard to find in the IBD paper that lists stocks by sector instead of alphabetically. It is ranked 17Th in its IBD group (Real Estate Dvlpmt/Ops Group) And the group is ranked 90th, which is weak. You would prefer a strong stock in a strong group.

The numbers were all up compared to same Q a year ago, but only around 10% - sort of slow. They seem to be making money of real estate sales commissions to wealthier clients, so they are dependent on the improvement in the real estate market. I can’t find a reason the stock crashed from about $45 to $29 the few days before to the day after earnings…unless this was it

Commenting on the Company’s business outlook, Mr. Kerin said “Looking ahead, we believe we are well positioned for future growth albeit at more normalized rates.

Goodbye growth investors.

They don’t seem like a company with great growth prospects and their YoY comparisons might be getting tougher.

So, its only hope is that it is a value play (or trap)

I will say one thing, if you miss this quarter, you get slaughtered. There is no mercy right now.

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Thanks for the reply. You are right that I am intolerant of the lack of RS before purchase, but I am much less so afterwards even if it defers further purchases - at least for a time if I can find no good reason for it.

In this case, the sector and abject fear of the effect of a miniscule interest-rate rise, the kind of remark you quote and the risk associated with smallcaps have given this attractive company quite a caning; an unwarranted one in my view.

Unlike you, I am extremely keen on 10% growth! I’ll take that! I am also attracted by the fundamental ratios MMI displays. On the other hand, I am no expert on the commercial property market and perhaps I am missing the lion in the grass.