Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real estate and gaming-related stock ideas.Often, beaten-down stocks are in the garbage bin for a reason. They're not value stocks, but instead just bad stocks, with negative stories that may only get worse. Casino operator Trump Entertainment ( TRMP) and construction-management firm Home Solutions of America ( HSOA) fall into this camp, and I continue to expect these stocks to disappoint investors in coming months. Both companies, which I've flagged as poor stock picks for several months now in the Bricks and Mortar mock portfolio, reported earnings this week. Of the two, Trump is the slightly prettier story, while Home Solutions continues to master the art of limited disclosure.
Trump a Tough CallTrump Entertainment shares rallied sharply after the company reported its second-quarter results this week. But investors shouldn't take this as a sign that the Atlantic City casino operator's stock is a buy now. Trump's stock hit a 52-week low of $5.15 prior to its second-quarter report Tuesday, but it rebounded and is now trading around $6.90. The casino operator
Home Solutions QuestionsHome Solutions, another stock I've flagged as overvalued, reported earnings late Thursday of 15 cents a share for its latest quarter, which was essentially in line with guidance. Revenue more than doubled from a year earlier to $51 million, helped by numerous acquisitions. Despite the improved results, the stock was down 65 cents, or 11%, to $5.17 in recent trading. There are several reasons for investors to remain wary of Home Solutions. Management is not giving earnings guidance for the remainder of the year -- a new policy. The company also continues to give zero additional color on its previously announced $200 million in contracts for projects in New York City and Tampa, Fla. The company still hasn't verified exactly where the bulk of these jobs are located, as I
|Bricks and Mortar Portfolio |
A look at how Nicholas Yulico's picks have performed
|Rating Date||Price at Rating||Rating||Current Price*||Return**|
|Brookfield Properties (BPO)||1/23/2007||$28.67||Own||$24.57||-14.3%|
|Global Real Estate ETF (RWX)||1/23/2007||$64||Own||$61.41||-4.0%|
|Penn National (PENN)||2/6/2007||$45.56||Own||$56.83||24.7%|
|Melco PBL (MPEL)||3/12/2007||$15.46||Own||$13.27||-14.2%|
|Home Solutions of America (HSOA)||4/24/2007||$4.98||Flag||$5.82||-16.9%|
|Average Total Return, Unweighted||7.6%|
|Close At Start of Portfolio||Current Value|
|U.S. MSCI REIT Index||1140.36||979.9||-14.1%|
|*(8/9/07 closing prices) |
**For "flagged" stocks, a drop in price is tracked as a positive for the portfolio, and a rise in price is a negative.