Hyperion increases conviction on key holding REA group

In a recent webinar Hyperion Asset Management highlighted that it had increased the level of conviction on key holding REA Group (ASX:REA). Justin Woerner, Portfolio Manager explained the rise in conviction is based on the fundamental belief that “earnings growth drives a stocks price in the long-term”. REA group recently posted strong results with 20% growth in both revenue and earnings on the back of the pricing of its depth listings and solid cost control. There is no question that Domain is becoming a more aggressive competitor as Fairfax directs traffic to the site but “the key metric of the amount of time spent on site clearly shows that REA maintains the number one position in the domestic market. Visitors spend 5.7 times more time on the REA site than they do on the Domain site and that number has grown by over 20% over the last 12 months…REA can continue to generate strong levels of EPS growth through growing its depth listings, developing additional revenue streams around their website and growth in European and US operations.”


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