Dividend Portfolio: Trade Me Group (ASX: TME)
Published 27-APR-2017 00:00 A.M.
|
2 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
Overview: Trade Me Group Limited ("Trade Me", "the Company") is a New Zealand-based software company focused on classified advertising. Trade Me owns and operates TradeMe.co.nz, New Zealand's largest online auction and shopping website and fifth most frequently visited website in the country. The site averages over 25m visitors per month and spans from auctions to fixed-priced sales for new and used goods, with automotive, real estate, and employment businesses.
Catalysts: Trade Me is the market leader in online classified advertising and has a strong track record of earnings and dividend growth. Over the past four financial years, revenue grew at a compound annual growth rate of 10%, and continuation of this trend whilst controlling expenses is the primary catalyst for shareholders. Payable in September 2017, Trade Me is expected to increase its full-year dividend, taking the annual yield to over 3.5%.
Hurdles: In order to retain its market-leading position, Trade Me has to invest significantly in product enhancements and marketing and the Company may be subject to increasing competition from NZ and overseas. As the Company is currently focused on New Zealand only, Trade Me may be operating in a saturated market, which may no longer generate sufficient new demand for its products and services.
Investment View: Trade Me offers profitable exposure to online retail trends in New Zealand. We are attracted to the Company’s growth trajectory, market position, and history of dividend growth. Competition and market-specific risks are primary hurdles and may challenge the Company’s ability to deliver ongoing dividend growth on favourable terms for shareholders. Overall we favour the balance of risk and believe that Trade Me offers a compelling mix of capital growth and income. We initiate coverage with a ‘buy’ recommendation and add this position to our dividend portfolio.
General Information Only
This material has been prepared by Jason Price. Jason Price is an authorised representative (AR 000296877) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C), and a Director of S3 Consortium Pty Ltd (trading as StocksDigital).
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, Jason Price, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, Jason Price, 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.
