OMAHA, NE—In a recent filing with the Securities and Exchange Commission, Magnolia Capital Fund, LP, disclosed the acquisition of 27,366 shares of RE/MAX Holdings, Inc. (NYSE:RMAX). The purchase, executed on November 18, 2024, was made at a weighted average price of $10.96 per share, amounting to a total transaction value of approximately $299,931.
Magnolia Capital Fund, LP, led by Adam K. Peterson, who serves as the managing member of its general partner, The Magnolia Group, LLC, now holds a total of 3,178,040 shares in RE/MAX Holdings following this acquisition. This transaction highlights the continued investment interest in the real estate franchise company by significant stakeholders.
The shares were acquired directly by Magnolia Capital Fund, LP, with both The Magnolia Group, LLC, and Adam K. Peterson having potential indirect beneficial ownership, although both entities disclaim beneficial ownership except for their respective pecuniary interests. The transaction was executed in multiple trades, with prices ranging from $10.94 to $10.99 per share.
In other recent news, RE/MAX Holdings announced its third-quarter financial results for 2024, revealing a mixed performance amid a challenging real estate landscape. The company reported a slight increase in adjusted EBITDA, rising to $27.3 million, and an improved margin. However, a decrease in U.S. agent count led to a 3.3% drop in revenue excluding marketing funds. On a positive note, RE/MAX saw growth in its international and Canadian agent counts, with the latter reaching a record high of nearly 25,400.
The company has adjusted its Q4 revenue guidance down by $1 to $1.5 million due to the impact of recent hurricanes. Despite this, RE/MAX remains optimistic about the future, focusing on growth initiatives and technology enhancements. The company's full-year 2024 revenue is estimated to be between $306 million and $311 million.
These recent developments show RE/MAX navigating its way through market challenges, leveraging strategic growth in international markets, and investing in technological innovation. The company's management expressed confidence in the network's strength and future growth potential, demonstrating proactive measures to support its affiliates and improve operational efficiency.
InvestingPro Insights
Magnolia Capital Fund's recent acquisition of RE/MAX Holdings shares comes at an interesting time for the company. According to InvestingPro data, RE/MAX's market capitalization stands at $354.86 million, with the stock trading at $11.41 as of the previous close. This represents a slight premium to Magnolia's average purchase price of $10.96.
InvestingPro Tips suggest that RE/MAX is currently trading at low EBIT and EBITDA valuation multiples, which could explain Magnolia's interest in increasing its stake. The company's price-to-book ratio of 0.84 further indicates that the stock may be undervalued relative to its assets.
Despite facing challenges, including a 5.61% revenue decline over the last twelve months, RE/MAX maintains a strong gross profit margin of 74.05%. This robust margin, coupled with an EBITDA growth of 13.59% over the same period, suggests the company is managing its core operations effectively even in a challenging market.
It's worth noting that while RE/MAX is not currently profitable, InvestingPro Tips indicate that net income is expected to grow this year, and analysts predict the company will return to profitability. This potential turnaround could be a key factor in Magnolia Capital Fund's investment decision.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for RE/MAX Holdings, providing a deeper understanding of the company's financial health and market position.
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