Trade Me (TME)

**RGR367** · 19-01-2018, 08:41 PM

Gut feel isn't so sure anymore that it will reach its height of more than 5 bucks soon again and having the sp recovered good enough since Oct/Nov, I sold almost a fourth of my holdings today. It's still a very good stock.

**sanctus671** · 01-05-2018, 02:16 PM

Any ideas what has triggered this recent bull run? Up to $4.7 from $4.3 just a couple of weeks ago. Hopefully the trend continues!

**Joshuatree** · 08-05-2018, 06:06 PM

$4.80 atm. Dont know s671 . seems to have started up after the strong job demand on the 9th april. The govt announcement of GST on overseas transactions hasn't dampened the demand either. Pretty healthy chart with the 60DMA in the dust and vol increasing.Happy holder

**sanctus671** · 04-08-2018, 02:09 AM

Originally Posted by Ogg

Is TradeMe too boring to talk about?

I built up a large position on this stock over the last few days. I took advantage of the recent share price drop and decided to go big! It's now trading at the 200 day moving average. Volume today was solid. I noticed a large $8m or so order go through in the afternoon, most likely a large hedge or Kiwisaver fund. I believe it has strong support at this level as back in early July it bounced hard from this same price point.

In the past, I've never really taken any interest in this stock as I saw it as too boring. However, it's kind of just occurred to me that this stock is just ABSOLUTELY BLOODY CHEAP AND GOOD VALUE at this price!

The Amazon and Facebook threats are over emphasised. Figures just out showed that Amazon sold a poultry $6.3 million in direct sales leading up to Christmas last year in Australia. Facebook Marketplace has been a flop and is fulled with scammers. Sure, I do believe that these two dominate players will eventually grow and become more relevant in NZ but you have to remember that online shopping is a very 'large pie' and growing 20% year on year. There's room for everybody and new players too.

TradeMe today is basically a classified business, not a second hand marketplace. There's very good growth from their Motors, Property, and Job listings. Overall, in my opinion, it's just a great little cash cow with a clean balance sheet and strong earnings, that will continue to outperform the market, albeit modestly over the medium to long term.

Compared to others like Seek or REA group, which is trading at a premium and lower yield, with false promises of better growth, the fact is that everybody seems to forget about little old NZ, unless of cause, it's milk. All things equal, if TradeMe was an "Australian brand", it would be trading much higher, regardless of growth potential. Look what happened to Xero when it left the NZX!

Ebay shares have been down over the cause of the year but still up alot over the long term. It's a different company with more competition in the classified space, and more risk exposure to the likes of Amazon and Facebook. With the recent appreciation of the USD dollar and $2b cash on hand, it could easily put in end to the almost 20 year monkey on it's back and finally acquire TradeMe - although highly unlikely and subject to OIO.

At the end of the day. You get a dividend yield of 6% with the benefit of decent growth and exposure as a tech play. Combined with a tightly run ship, low-ish overheads, and strong brand recognition, what's not to like about this stock? It deserves to be $5 I reckon and $6 12-18 months from now. End of year earnings results are due in 3 weeks. Time will tell.

Thoughts?

Absolutely agree. I held this opinion for a long time even when the initial big drop happened last year. It seems like TradeMe gets a hard time from analysts that want to find all the negatives in the company wherever they can while ignoring the bigger picture. TradeMe is easily the most reliable way to trade second hand items in NZ (use fb marketplace to sell or buy to realize how garbage it is). And the marketplace is not even its biggest strength with classifieds, motors, and real estate. It's also well run, and well diversified to protect against competition like fb marketplace and amazon. One particular example I always tell people is that TradeMe is part owner of Harmoney, the P2P lending platform which is a fantastic business in itself. Last years report outlined that they were planning for conservative profit growth this year as they focus more on investments which is why the share price got hammered. I'm confident that the company has some great growth ahead of it, but of course time will tell. Interested to see what the upcoming report says.

Disc. am a holder

**Joshuatree** · 04-08-2018, 11:13 AM

Great to have some other holders.Im still in. Amazon has had poor takeup in aus at this point but it is a monster lurking in the woods in future.Facebook Mkt place is small and with very limited features and no checks and balances at all that i can see but some young people like it, its free.

The other threat is NZME,they are attacking Trademes three main earners real estate, jobs, cars ,with their sites ONE ROOF.YUDU and DRIVEN. Early days atp but with all their media publications NZME have the marketing reaches afar. Note the many full page ads in the herald for ,One ROOF. Real estate have set up their own house selling site too after trademe changed its fees etc.Trade me has backed down and reduced its fee structure.

Trade Me keeps coming up with new ticket clippers. insurance a recent one and has accomodation, online dating and group buying sections as well. It is still the dominant iconic online mkt place by far.

**kiwico** · 05-08-2018, 04:41 PM

Originally Posted by sanctus671

TradeMe is easily the most reliable way to trade second hand items in NZ (use fb marketplace to sell or buy to realize how garbage it is).

At the recent NZX investor evening in Wellington the Trade Me CFO explained it was an ex-Trade Me employee that apparently suggested marketplace to FB (and then built it). Haven't gone near it (FB marketplace that is) - sometimes a degree of anonymity but a good buyer/seller rating is what you want.

Also still a holder but looking forward to the high fives again at some point.

**kiwico** · 06-08-2018, 10:27 AM

[QUOTE=Ogg;723585]Also: Take a look at the Alexa ratings in both New Zealand and USA.

TradeMe is at number 5, up there with the other FAANG stocks./QUOTE]

Thanks for this. Interesting to see that Trade Me is way ahead on Daily Time on Site of the top 50, beaten only by Ali Express (which from my experience is because you either can't find what you want on AE or because the price shown suddenly doubles for no reason). Plus comes second in Daily Pageviews per Visitor which is good for all that advertising on each page.

Happy holder but unless market starts to understand the cultural dynamics of New Zealand consumers the price is not likely to change much.

**moka** · 06-08-2018, 07:05 PM

Morningstar have usually had TME valued at lower than market price and often with ‘sell’, but as the latest update shows they just did not understand the company and market. It shows the value of holding an investor day.

Morningstar valuation $4.60 – updated 15/05/18
Trade Me Investor Day Provides Revenue Growth Reassurance; FVE Increased to NZD 4.60

Narrow-moat-rated Trade Me's first ever investor day provided a comprehensive review of the business, including access to senior executives and a whopping 136-page slide deck. Our key takeaway is that the revenue growth outlook and addressable markets for Trade Me's online classified advertising businesses, including property, employment, and automotive, are larger than we previously assumed, and we have increased our revenue growth forecasts accordingly. We've also slightly lowered our revenue growth forecasts for other divisions, which are dominated by the mature general items division. But the net result is an increase in the group revenue CAGR over the next decade to 6.1% from 4.9% which has driven a 9% increase in our fair value estimate to NZD 4.60 per share. At the current market price of NZD 4.75, we consider shares to be slightly overvalued. Our fair value implies a fiscal 2019 price/earnings ratio of 17.5 and a dividend yield of 4.6%, or 6.0% including the imputation credits available to New Zealand taxpayers.