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Coffee Talk
+ Slowdown?
What slowdown?
Judging from the building-permit data in Lee County, you wouldn't think there's a construction slowdown looming.
According to the latest statistics from the Lee County Community Development Department, the county has already issued 18,000 permits for more than $1.6 billion worth of new construction this year through April.
At that rate, permits will exceed last year's blockbuster numbers. In 2005, Lee issued over 49,000 permits for $4.7 billion worth of new construction.
For more positive real estate news, read on.
+ The optimist
Just when you thought hurricanes, insurance shocks and rising interest rates were starting to choke off the phenomenal growth of Florida's housing market, at least one economist is staying positive.
After studying the numbers and the charts, Ivana Rupcic says Americans are still moving to the Southeast, and especially to Florida.
The economist with RBC Financial Group, a unit of the Royal Bank of Canada, says the population of the Sunshine State grew 2.3% in 2005, good for fourth highest in the nation. Most of the growth was attributable to in-migration from domestic locales.
"A significant reason for much of the migration into the Southeast is due to strengthening employment markets and this, along with rising income, are key determinants for increased spending and borrowing," Pupcic writes in a recent report.
That must be nice for local lenders to hear after the Florida Association of Realtors reported May 15 that sales of existing single-family homes in the state fell 20% during the first three months of this year.
Yet those fewer Florida homebuyers may be in a better position to pay off their mortgages than those who were buying dwellings with adjustable-rate loans a year or two ago when interest rates were lower. "Against a backdrop of strengthening employment, rising personal incomes and slowing debt growth, credit quality is poised to remain strong in the area despite moderate increases in interest rates," writes Pupcic.
She says residential mortgages in foreclosure as a percentage of loans serviced have been dipping in Florida since 2002. The rate remained below 0.5% for the first quarter of this year, far healthier than the national average.
+ Neogenomics profitable
Neogenomics, a small Fort Myers-based genetic cancer-testing firm recently achieved its first quarterly profit.
The company reported net income of $106,434 on revenues of $1.3 million in the first quarter of 2006. "We turned the corner sprinting," says Steven Jones, acting principal financial officer.
Shareholders have been rewarded as well, doubling their money in the last five months. The company's stock (symbol NGNM.OB) traded at 31 cents per share in late November. Recently, the stock has traded at 60 cents per share. The stock's trading volume has risen to 70,000 shares a day on average. "That makes our valuation a lot more real," Jones says.
+ Remarkable individual
Ali Ebrahimi, president/owner of Houston-based Ersa Grae Corp. and developer of downtown Sarasota's prominent Plaza at Five Points, has a remarkable personal story. Ebrahimi grew up the son of a farmer in Tehran, Iran, and created Iran's largest residential development company in the 1970s, Gostaresh Maskan. When the radical terrorists overthrew the shah of Iran, Ebrahimi had all of his property confiscated by Iran's new rogue government. He escaped to the United States, and like so many immigrant entrepreneurs, he started over. He built Ersa Grae into a highly successful commercial development firm.
Two weeks ago, the National Ethnic Coalition of Organizations in New York City honored Ebrahimi with its highest award, an Ellis Island Medal of Honor. Created in 1986, the medal honors remarkable individuals of various ethnic backgrounds for their contribution to the United States.
+ Chico's is buying low
The stock of Fort Myers-based Chico's FAS has been hit hard this spring following disappointing sales numbers. Chico's stock recently traded at about $29, or about 40% off its 52-week high.
But company officials say now's the time to buy the stock. Fresh on the heels of a $100 million stock buyback, Chico's officials say they're going to buy back another $100 million worth of the company's own stock.
"This decision takes into account our view that our shares are currently undervalued by the market, and expanding this program represents an appropriate and best use of the shareholders' money," says Scott Edmonds, Chico's president and CEO, in a statement.
Measured against the broad market though, some investors may still consider Chico's stock price expensive. Chico's price-to-earnings ratio, a valuation measure that divides the stock price by earnings per share, is currently 28. Meanwhile, the P/E ratio for the Standard & Poor's 500-stock index is 18. Even against other apparel stores, Chico's has one of the highest P/E ratios. The apparel store industry has a P/E ratio of 16. Still, investors tend to pay more for a stock when its growth prospects are hot. "We believe that the current stock price does not reflect the strength of several of our key performance measures and our prospects for future growth," Edmonds says.
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