Tag - CSGP

Mention “real estate” around stock traders, and many are likely to cringe. But there are some bright spots amid the rubble of the subprime lending fiasco and the burst housing bubble, and CoStar Group (Nasdaq:CSGP) could be one of them.

The Bethesda, Md.-based company celebrated last year its 20th anniversary of providing data to the commercial real-estate sector, which undeniably has been hurt by a wounded U.S. economy. By some measures, though, commercial has fared better than residential.

While CoStar Group is not on the front lines searching for a buyer, it is an enabler, dishing up data to connect buyers and sellers.

Analysts who follow CoStar have a generally favorable outlook, despite the sluggish real estate demand. In a recent tally by Thomson Reuters, of the six analysts surveyed, two rated CoStar a “strong buy,” one had it at “buy,” with the other three at “hold.” The Thomson median price target is $56.

However on Tuesday, Needham & Co.’s Jonathan Maietta cut CoStar to “buy” from “strong buy” based on current valuation, but kept his price target at $65.

Since the start of the year, CoStar Group’s share price has meandered closer to its 52-week high of $62.88, set last Oct. 11, while distancing itself from the 52-week low of $35.94 hit on Feb. 7. CoStar Group closed Friday at $53.86.

In its 2007 annual report, CoStar Group calls itself “the leading provider of information services to the commercial real estate industry in the United States and United Kingdom,” backing up that assertion by stating that it offers “the most comprehensive commercial real estate database available, [and has] the largest research . . .

The Russell 2000 has slipped to its lows on the session midday, as a weak July retail sales report and a rebound in crude oil prices have kept small caps submerged in the red.

At 12:35 p.m. ET, the Russell 2000 (NYSE:IWM) had skidded 6.87, or 0.92%, at 738.07, while the Dow slumped 165.2, or 1.42%, to 11,477.27.

The Census Bureau reported this morning that retail sales dropped 0.1% in July, down from June’s 0.1% uptick and the weakest in five months. Weak auto sales were the main culprit that dragged down sales, as a soft economy and sky high gas prices continued to take a toll on demand for cars. Sans autos, retail sales would have posted a 0.5% increase for July. However, even excluding auto sales, retail sales would have only been buoyed by consumption of gas on the part of higher prices, not higher demand. 

“This sales report marks only the beginning of the third quarter and though it is not looking very good for U.S. consumers, it wasn't quite as bad as expected,” BMO Capital Markets economist Jennifer Lee wrote in a note today. “But we could be seeing some final effects of the rebate checks here, and as they fade, real consumer spending likely fell for in Q3, the first in about 17 years.”

In other economic news, import prices soared 1.7%, which was above the forecast, and year-over-year prices were up 21.6%, the highest rate in 26 years.

The business inventory report came out at plus 0.7%, which was above the forecast for a rise of 0.4%. However, this data series is somewhat dated (June figures) and tends to have very little lasting impact on stock market traders.