Gathering New Information about Stocks, Health, and Sports

         Typically when a new IPO comes out, the response by shareholders is not usually one of optimism for many investors as the share price is usually listed too high for most industries. However, there is one particular area, the financials, where IPOs tend to perform extremely well during its first few months which eventually lead to the strong long term asset holding advocacy that many expert investors utilize. Recently, a new company, Douglas Emmett (DEI), a real-estate investment firm, went public and provided investors for a new chance to profit in the financial sector.
         Looking at what the company actually does, it may seem difficult to assess the positives about purchasing shares of, not only a newly integrated company, but one who is associated with housing market. Given the economic conditions that have provided negative sentiment and a bad taste in the mouth of many investors regarding stocks such as these, when it comes to the financials, economic data does not affect companies the same way as other dependent industries. Since the technique of proving a direct correlation between what happens regarding economic data and how the stock will perform is unreliable, a more comparative analysis needs to be utilized.
         To continue, because Douglass Emmett does not have the financial fundamentals to look at, it is important to compare this company to others of the same sector. Looking at another real-estate investment firm, Developers Diversified Realty Corp (DDR), there should be a definite sense of optimism when regarding this company to Douglas Emmett. About one month ago Developers Diversified released their quarterly earnings which turned out a positive sentiment from its current and future shareholders, boosting up the share price to a 52 week high multiple times. To provide another example, one other real-estate diversified firm, Vornado Realty Trust (VNO), also recently reported earnings about one month ago. Consequentially, not only did the numbers boost the shareholder’s value of the company, but led the share price of Vornado to multiple 52 week highs with an increase of near 10% in less than a month.
         As Douglas Emmett will report results on December 5th, because this company follows its rivals closely, and because Douglass Emmett may very well be undervalued, I would say there is a terrific chance of garnering some capital gains by investing in this company before they will release earnings. Therefore, while you may argue that the housing sector is not performing well enough for you to risk your money to invest in, when it comes to financials such as Douglas Emmett, there really is more reward than risk regardless the price.

-Dennis Biray
November 25th, 2006