Move.com's Making All the Right Ones

Editor's note: This Stocks Under $10 alert was originally sent to subscribers Nov. 6 at 9:57 a.m. EST. It's being republished as a bonus for TheStreet.com and RealMoney.com readers. Frank Curzio heads TheStreet.com Stocks Under $10 Investment Team.

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We are initiating a 1,000-share position in Move.com(MOVE Quote), which was recently trading at $4.84. The online company provides advertising and marketing services to the real estate industry, and we believe this Inflection Point stock -- a company in our rating system that has a broken business model but is on the mend -- offers a favorable risk/reward at the current price.

Just like Drugstore.com(DSCM Quote), one of our model-portfolio holdings, Move.com was an Internet highflier, trading as high as $138 a share in January 2000 before falling back to earth.

Now we believe that Move.com is undervalued based on its leverage to the real estate advertising market, strong financials and key initiatives.

Some of Move.com's Internet properties include Realtor.com, which is the official site of the National Association of Realtors trade organization and focuses on the existing-homes market; HomeBuilder.com, which focuses on new homes; RentNet for apartment rentals; and Moving.com, move-related services.

These sites provide Move.com with a niche in the online real estate market, which is seeing strong advertising growth.

Over the past five years, the housing market has been robust, with housing prices increasing more than 20% annually in some areas because of record-low interest rates. Now that interest rates are closer to historical norms, the white-hot housing market -- which some analysts described as a bubble -- has cooled.

While this may be perceived as a negative for Move.com, the fact that listings need to be advertised online for a longer period of time bodes well for the company.