The Real Estate industry as a whole closed the day down 0.2% versus the S&P 500, which was up 0.1%. Laggards within the Real Estate industry included Optibase ( OBAS), down 2.7%, China Housing & Land Development ( CHLN), down 2.6%, Vestin Realty Mortgage I ( VRTA), down 4.4%, Power REIT ( PW), down 4.0% and BRT Realty ( BRT), down 2.4%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Marcus & Millichap ( MMI) is one of the companies that pushed the Real Estate industry lower today. Marcus & Millichap was down $4.23 (8.1%) to $47.86 on heavy volume. Throughout the day, 492,975 shares of Marcus & Millichap exchanged hands as compared to its average daily volume of 188,000 shares. The stock ranged in price between $45.64-$51.02 after having opened the day at $51.02 as compared to the previous trading day's close of $52.09.

Marcus & Millichap, Inc., a brokerage company, provides investment brokerage and financing services to sellers and buyers of various types and sizes of commercial real estate assets in the United States and Canada. Marcus & Millichap has a market cap of $2.0 billion and is part of the financial sector. Shares are up 56.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Marcus & Millichap a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Marcus & Millichap as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on MMI go as follows:

  • The revenue growth came in higher than the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 29.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MMI's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 39.15% is the gross profit margin for MARCUS & MILLICHAP INC which we consider to be strong. Regardless of MMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.11% trails the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Management & Development industry average, but is greater than that of the S&P 500. The net income increased by 37.2% when compared to the same quarter one year prior, rising from $12.80 million to $17.56 million.
  • Powered by its strong earnings growth of 36.36% and other important driving factors, this stock has surged by 109.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

You can view the full analysis from the report here: Marcus & Millichap Ratings Report

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At the close, BRT Realty ( BRT) was down $0.17 (2.4%) to $6.83 on average volume. Throughout the day, 3,438 shares of BRT Realty exchanged hands as compared to its average daily volume of 3,000 shares. The stock ranged in price between $6.76-$6.95 after having opened the day at $6.95 as compared to the previous trading day's close of $7.00.

BRT Realty Trust, a real estate investment trust (REIT), owns, operates, and develops multi-family properties in the United States. It operates through two segments, Multi-Family Real Estate and Other Real Estate. BRT Realty has a market cap of $99.0 million and is part of the financial sector. Shares are up 0.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates BRT Realty as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on BRT go as follows:

  • BRT REALTY TRUST has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, BRT REALTY TRUST reported poor results of -$0.76 versus -$0.25 in the prior year.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 678.9% when compared to the same quarter one year ago, falling from -$0.33 million to -$2.58 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BRT REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BRT REALTY TRUST is currently extremely low, coming in at 11.77%. Regardless of BRT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BRT's net profit margin of -12.14% significantly underperformed when compared to the industry average.
  • In its most recent trading session, BRT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: BRT Realty Ratings Report

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China Housing & Land Development ( CHLN) was another company that pushed the Real Estate industry lower today. China Housing & Land Development was down $0.03 (2.6%) to $1.21 on average volume. Throughout the day, 5,152 shares of China Housing & Land Development exchanged hands as compared to its average daily volume of 5,800 shares. The stock ranged in price between $1.21-$1.28 after having opened the day at $1.28 as compared to the previous trading day's close of $1.25.

China Housing & Land Development, Inc., a real estate development company, acquires, develops, manages, and sells commercial and residential real estate properties primarily in Xi'an, the People's Republic of China. China Housing & Land Development has a market cap of $8.6 million and is part of the financial sector. Shares are down 51.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates China Housing & Land Development as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on CHLN go as follows:

  • The debt-to-equity ratio is very high at 2.68 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Real Estate Management & Development industry and the overall market, CHINA HOUSING & LAND DEV INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA HOUSING & LAND DEV INC is rather low; currently it is at 19.12%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -2.01% is significantly below that of the industry average.
  • CHLN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 84.75%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Management & Development industry average, but is greater than that of the S&P 500. The net income increased by 38.1% when compared to the same quarter one year prior, rising from -$0.77 million to -$0.48 million.

You can view the full analysis from the report here: China Housing & Land Development Ratings Report

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