Why Corelogic (CLGX) Shares Declined Today

NEW YORK (TheStreet) -- Shares of Corelogic Inc. (CLGX) declined 2.09% to $30.45 today as the Federal Trade Commission placed conditions on the company's proposed $661 million purchase of DataQuick Information Systems after assessing that the deal would limit competition in the market for certain bulk real estate data.

CoreLogic agreed to settle FTC charges that the proposed acquisition would likely substantially lessen competition in the market for national assessor and recorder bulk data.

According to the FTC's complaint, the proposed combination of CoreLogic's and DataQuick's national assessor and recorder bulk data businesses would eliminate one of only three providers of national assessor and recorder bulk data. 

To preserve competition that would be lost due to the acquisition, the FTC's proposed settlement order requires CoreLogic to license to Renwood RealtyTrac national assessor and recorder bulk data as well as several ancillary data sets that DataQuick provides to its customers. 

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TheStreet Ratings team rates CORELOGIC INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CORELOGIC INC (CLGX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CORELOGIC INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CORELOGIC INC increased its bottom line by earning $1.34 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.52 versus $1.34).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • Net operating cash flow has declined marginally to $91.11 million or 3.73% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the IT Services industry. The net income has significantly decreased by 188.9% when compared to the same quarter one year ago, falling from $14.69 million to -$13.05 million.
  • You can view the full analysis from the report here: CLGX Ratings Report

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CoreLogic, Inc. has agreed to settle Federal Trade Commission charges that its proposed $661 million acquisition of DataQuick Information Systems, Inc. from TPG VI Ontario 1 AIV L.P. (TPG) would likely substantially lessen competition in the market for national assessor and recorder bulk data.

According to the FTCs complaint, the proposed combination of CoreLogics and DataQuicks national assessor and recorder bulk data businesses would eliminate one of only three providers of national assessor and recorder bulk data. The complaint alleges that the proposed acquisition would increase the risk of anticompetitive coordination between the remaining two market participants and the risk that CoreLogic would unilaterally exercise market power and raise prices for customers.

To preserve competition that would be lost due to the acquisition, the FTCs proposed settlement order requires CoreLogic to license to Renwood RealtyTrac (RealtyTrac) national assessor and recorder bulk data as well as several ancillary data sets that DataQuick provides to its customers. As proposed, the order allows RealtyTrac to offer customers the data and services that DataQuick now offers and to become an effective competitor in the market. RealtyTrac operates an online marketplace of foreclosure real property listings and provides national foreclosure data services to real estate consumers, investors, and professionals.

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