Stake in PropTiger fits with REA’s global expansion strategy
Published 11-JAN-2017 12:16 P.M.
|
3 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Multinational digital advertising business, REA Group (ASX: REA) has announced its intention to acquire a 14.7% strategic stake in PropTiger, a leading digital real estate marketing platform in India.
Notably, NewsCorp is currently the largest holder of PropTiger and will hold a 21% stake after completion of REA’s investment. REA’s Chief Executive, Tracey Fellows highlighted the fact that this investment will leverage REA’s real estate and digital expertise together with NewsCorp’s content, distribution and marketing strengths to ensure success, continuing to build value for shareholders.
PropTiger owns and operates proptiger.com, Makaan.com and it has just announced the acquisition of Housing.com. Establishing this combined network of digital property portals has promoted the group to a top three position in the Indian market across key consumer engagement metrics, including time on site and visits.
Importantly, PropTiger is the only player in India offering the full range of online and off-line property services, such as personalised search, virtual viewing, site visits, home loans and legal and financial diligence.
In highlighting the significance of this market Fellows commented, “India is one of the fastest-growing property markets in the world and the country is seeing a rapid transition from traditional to digital real estate advertising”.
This initiative is consistent with management’s strategic focus outlined at its AGM in November where Fellows said, “The third pillar of our strategy is about being global and having already extended our reach to 4 continents and 11 countries we will leverage our scale, our knowledge and our capability to increase our speed to market and our competitiveness”.
The response to the PropTiger initiative was noticeably positive in trading patterns yesterday. After the company’s shares had slumped from $57.40 to $56.80, they recovered nearly all of this lost ground in the last hour of trading following the announcement at 3:15 PM.
Consequently, when analysts assess this development the response could be positive, perhaps resulting in REA share price pushing up towards its consensus price target of $60.25.
Analysts at Citi recently ran the ruler across a number of Australia’s ASX listed online media and publishing companies, and REA was one of the standout stocks with its buy recommendation supported by a 12 month price target of $59.95.
In discussing the group’s outlook, Citi said, “Despite subdued property market turnover, we forecast a three-year earnings per share compound annual growth rate of 18% with scope for significant upgrades (potential eps upside of more than 15%) from a normalisation of activity levels in the property market”.
It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.
General Information Only
This material has been prepared by StocksDigital. StocksDigital is an authorised representative (CAR 000433913) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.