As of late, the subprime mess has made many investors run from any stocks having to do with real estate or mortgages, but before you head for the hills just yet, consider this: additional interest rate cuts by the Fed would likely encourage a new wave of mortgage refinancing. This would not only benefit Bankrate.com, Inc. (Nasdaq: RATE), and Move, Inc.’s (Nasdaq: MOVE) Realtor.com, but also the investors who roll the dice in the general direction of these two mortgage shopping websites.

Bankrate.com is the leading online website for mortgage shopping, and owns and operates several Internet-based consumer banking sites.

Its flagship site, Bankrate.com, aggregates information that allows consumers to compare mortgages, home equity loans, auto loans, credit cards, money market and CD rates and ATM fees. Bankrate.com gathers this information from approximately 4,800 financial institutions and 575 markets nationwide. 

Revenues are generated from selling advertising on its consumer finance websites, which include Bankrate.com, Interest.com, FastFind.com and Mortgage-cacl.com. In addition, the company sells advertising in its published mortgage, CD and deposit rate guides and through its subscription newsletters. It also generates fees from licensing its data to research organizations.

Recent acquisitions are enabling Bankrate.com to extending its reach into new consumer finance segments. In December and January, the company acquired Nationwide Card Services, a Web-based credit card marketer; SavingsforCollege.com, which specializes in 529 savings plans for college tuition; InsureMe, which operates a website where consumers can compare insurance rates; and Lower Fees, which operates Fee Disclosure, an online site for comparing mortgage transaction and closing fees. The combined purchase price of the four businesses was approximately $98 million, excluding potential cash earn-outs based on achieving certain financial performance metrics. 

Bankrate.com’s total revenues increased 20% in 2007 to $95.6 million from $79.6 million, driven by 31% year-over-year growth in on-line revenues, 26% improvement in graphic advertising revenues and a 38% gain in hyperlink revenues, which was partially offset by a 24% decline in print publishing and licensing revenues. Despite doubling net income in 2007 to $20 million, or $1.04 per share, from $10 million, or $0.56 per share last year, Bankrate.com’s shares fell due to lower-than-expected December quarter results. 

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