Carsales.com Remains Undervalued Following Market Over-reaction to 1H Result
We have maintained our fair value estimate for narrow-moat-rated Carsales.com at AUD 14.50 per share following its weak first-half result. At the current market price of AUD 11.52, we continue to believe the shares are undervalued and that the market is underestimating the potential of the international businesses and the resilience of the core Australian businesses. The market price implies a fiscal 2019 price/earnings ratio of 22, versus 27 at our fair value, and a dividend yield of 3.9%, or 5...Carsales.com's principal activities consists of: online advertising services, which include classified advertising and display advertising services; data and research services, which include software, analysis, research and reporting, valuation services, website development and hosting as well as photography services; finance and related services, which include the Stratton Finance Pty Ltd subsidiary that provides finance arrangements for vehicles, boats, and other leisure items, vehicle procurement and other related services to customers; and international services, in which Co. has operations in overseas countries through both subsidiaries and equity accounted associate investments.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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