Countrywide, Plc.
Thesis
Countrywide is poised to benefit from a recovery in housing transaction volumes in the U.K., which are currently below historical levels. The company has improved its cost structure post-recession, allowing for high incremental margins and strong free cash flow generation. With management aligned with shareholder interests and opportunities to roll up rental businesses, Countrywide is expected to compound at double digits over the next 4-5 years.
Did it work?
The long thesis for Countrywide anticipated a recovery in housing transaction volumes and strong financial performance, but the stock has declined by 90.6% over 142 months, indicating a significant failure to meet the expected growth. The substantial drop in price suggests that the anticipated recovery and improvements in the company's cost structure did not materialize as expected.
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