Another way to make money from property
One company that we think high quality, and is still cheap compared with our estimate of their value is REA Group (ASX: REA). REA’s revenues are primarily driven by the sales of premier/highlight listings on realestate.com.au, and data that records listing volumes can be used as a proxy for where said revenues are headed. While nationwide listings are down since the end of December as per the seasonal trend, on a year-on-year basis, considerable growth is observed. And in a market where listings volumes have been under pressure, REA’s revenues have grown more than 50 percent on the back of price increases and changes in the volume of premier ads. Our REA valuation is currently $65; this compares with analysts we know who have price targets between $52.19 and $56.50. The implication is that if we are right, not only could we make more money for our investors but it could happen quickly if the rest of the analyst community rerates the company. Read the full article: (VIEW LINK)
2 topics
1 stock mentioned