Trade Me (TME)

[warthog]

The issue with TME is not real estate listing. It is the lack of innovation. For example, they've missed their opportunity to make an impact with selling brand new items due to the lack of value-add. Now other retailers are catching up and consumers are used to shop around multiple shopping Web sites. To make the matters worse, international sites are making it easier and cheaper to buy. Technology is no longer a key differentiator. And they don't have a strong strategy in their business direction. The only way forward seems to be acquisition and continous dilution of profit margin.

True, and you will see this with TME equivalents around the world.

One could almost be forgiven for saying that, for a period after the original founders of a company depart (from day-to-day running of a business), there is a stage where the business has little direction and stops taking risks (innovation). Over time even these businesses slowly wake up and realise that they need a kick in the proverbial and get the right people in place to rejuvenate the company.

Ebay, Apple, HP and others for example.

[warthog]

nor have the real estate agents put their general fee's up 350% in recent year's despite selling 98% of the market as a collective

Comparing absolute (not relative) fees, and considering how crucial the product/service is as a component of the selling process, which of Trademe and the real-estate agents are charging far in excess of the value of their service?

If you believe this to be Trademe, then we are on different planets.

Note that not all real-estate agents are hugely overpaid.

Just 99.99% of them.

BTW plural does not require an apostrophe, so "fees" rather than "fee's" and "years" not "year's".

[Jay]

nor have the real estate agents put their general fee's up 350% in recent year's despite selling 98% of the market as a collective

Haven't had to, the house prices have gone up instead. After all their commision is mainly % based

[warthog]

nor have the real estate agents put their general fee's up 350% in recent year's despite selling 98% of the market as a collective

http://www.stuff.co.nz/business/mone...bidding-client

$2k "fine", increased on appeal to $4k.

How about these figured increase 100-fold. Then they might take them seriously.

No? Why not? If they follow the rules, no fine.

[warthog]

http://www.nzherald.co.nz/property/n...ectid=11265449

Bully agent fined $2000 and Bayleys $1500.

For pressuring a widow into accepting $100k less for a property.

But they are all good people, right?

[Mista_Trix]

Ex-boss to take on Trade Me;
http://www.stuff.co.nz/business/indu...ke-on-Trade-Me

[modandm]

Hi everyone,

Just wanted to say I am quite interested in TME, and have begun accumulating what should grow out to be a decent position for me. It's the only NZ stock I own except AIR.

My investment case in brief is:

The company is of fantastic quality - I can't stress this enough. Its probably a better business than even AIA (i.e unregulated monopoly position, pricing power, high returns, cash flow etc). However its de-rated from c.25x PE to c. 17x PE as investors have reacted negatively to rising investment, which is slowing earnings growth. I see this reaction as short-termist and myopic.

I believe that the company can return to solid (but not spectacular), rates of earnings growth, as compounding revenue growth occurs through the next few years, and costs rise at a lower rate. I think the issue with property is a storm in a teacup and that in three years time will all be forgotten, yes in the short term they have made concessions - big deal. TME will continue to innovate or simply copy offshore peers as they have been (with mixed success), and remain very dominant. They can also grow by acquisition as they have done with good success in the past. This is a secular growth industry and one where NZ trails other countries and will continue to catch up. As a result of improving growth (back to say 7-10% p.a), the valuation multiple should increase back towards 20x PE. If we use a figure of say 25c earnings for FY17 which I feel is conservative the stock is worth $5 per share, with dividends taking the total return to about 60% up from $3.50 where we are at today.

I'll go into more detail about some of my major assumptions in a later post.

Be great to hear some investment thoughts - and not oh the website is so expensive now, or my dad doesn't sell on it anymore. Also be interested to know who else is on-board so to speak.

mod

[winner69]

Real Estate agent told me this morning that realestate.co.nz is now getting as many page views as trademe .....she reckon was as low as 20% last year so getting to 50% of views is pretty good

Still tells vendors to put the house on trademe as well even though its a few hundred bucks extra

[okane]

Real Estate agent told me this morning that realestate.co.nz is now getting as many page views as trademe

First lesson in this biz is never believe what real estate agents say.

[RGR367]

First lesson in this biz is never believe what real estate agents say.

I just look around in my office for some feedback on this stock. Before, most of my office mates (about 40 plus) would have one of their computer screens dedicated on TradeMe for some buying/selling actions everyday. Now, lucky for me to see 5 screens on it the whole day. I'm still holding/accumulating the shares though.