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Postigol

Rightmove

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(Mods - please move to investment forum if this is the wrong place, but thought it might be worth spending a little time in the main forum.) This friday sees an interim earnings release from property website Rightmove. Given that this stock has in the past acted as something of a proxy for the UK housing market, I'd be interested in getting the forums thoughts on it. When the **** fell out of the UK housing market in 2007 the shareprice bombed - from record high of 622 in Sep 07, to 161 in Jan 09. The shareprice tends to follow, rather than lead, but it is perhaps a good indicator of how (supposedly) smart money views the UK housing market Actually, the performance of the business held up well over this period, with the year end dec 07 ebit of £28m increasing to £39m in 08, and holding at £38m in 09 (albeit sales dipped slightly in 09, and the margin was maintained only by slashing overheads). Given the above, and (one supposes) returning confidence in the UK housing market, the price has shot right back up, to a high of 724 in June this year. It's a come off a little since then, but management noises have all been very positive (busiest year ever on the website for traffic etc - although you could make the case that higher traffic actually shows a stagnant market). Anyway, what do people reckon - will friday bring poor results and further evidence of a housing market that has run out of steam, or will the business power on and push towards a £1bn market cap. Answers on a postcard please. Disclosure: I went short around 660ish, as I believe that a £700m+ market cap for a business that generates only £40m ish of cash is toppy. I think it's a good business, with good management, but I don't see where the earnings growth implied in the p/e is coming from - they already have 99% of UK estate agents signed up, so the only possibility is increasing prices - ultimately unsustainable as leaves them open to competition (see google's tentative steps in the property advertising space). Obviously, this is not investment advice, do your own research etc etc.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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