Bluegreen Changes Timeshare Colors

Thursday was a mixed bag for real estate developer Bluegreen(NYSE: BXG). The company posted fourth-quarter results that seemed flattish on the surface. Profits fell from $0.23 a share to $0.22 a share for the period, as fourth-quarter sales dipped from $126 million to $120 million.

Dig deeper into the company's two main businesses and that's where the disparity is obvious. The company's timeshare business, which makes up a little over two-thirds of the company's overall business, grew 8.7% higher. Its homesite sales business, where the company buys a large parcel of land and carves it out into individual community lots, fell by 23.7% over the same three months

Yes, Bluegreen was risking that kind of slide in its homesite efforts when the housing market began to rumble. Higher interest rates have cooled off the once red-hot real estate speculation. The company can still make a cozy living buying huge tracts of land and divvying them up accordingly, but it's the company's timeshare business that should excite investors at that point.

Yes, I said timeshare. Even though it's politically correct these days to refer to the travel offerings as "vacation intervals," we all know that we're still talking timeshares here. As housing prices have gone through the roof, but rental and lodging rates have been kept in check, folks who may have been eyeing vacation homes and investment properties are now turning back to timeshares as more affordable alternatives.

It doesn't hurt that you now have big companies like Marriott(NYSE: MAR), Disney(NYSE: DIS), and Hilton(NYSE: HLT) educating the market. It's helped clean up the image of timeshares as a product of strong-armed contracts after high-pressure sales presentations.

You have plenty of public players toiling in this intriguing sector. Beyond Bluegreen you have companies like Sunterra(Nasdaq: SNRR), Silverleaf(Amex: SVL), and Cendant's (NYSE: CD) Trendwest Resorts.