The $28 million bet against online real estate company is unique in the respect that it’s Greenlight’s first bet against a web-based business. The hedge fund has however shorted property developers before, his most celebrated such bearish bet is against The St. Joe Company (NYSE:JOE), Einhorn was still shorting the company as of November 2013.
These are the last of the ill-fated idea to short a bunch of REITs into the real estate collapse, based on the view that the market would re-rate real estate to be a riskier asset than it had been prior to the collapse. One by one we have given up on these ideas, and now they are all gone. The first cover was the best cover.
Nomura gave Rightmove a Buy rating in their research note, they said that with the 15% reported increase in traffic in January and 4 million new queries, the future looks positive for the company. Nomura further said that according to their forecast Rightmove will experience 17% earnings growth in 2014, resulting in an EPS of GBP92.8.
In their recent earnings call, the company reiterated its commitment to returning excess cash to shareholders via buybacks and dividends. All analysts estimate that Rightmove faces no threat from its competitors, Zoopla and Agents Mutual. The company estimated a £60-70 increase in ARPA (average revenue per advertiser) per month in 2014, which Barclays believes is an underestimation. While saying that in an attractive UK property market, Rightmove Plc (LON:RMV) (OTCMKTS:RTMVY) could experience 20% higher revenue growth than their 2014 estimates. Barclays increased their estimates for total customers to 20,370 and ARPA increase to £72 y-o-y in 2014.
“If you look across our companies, one theme across our best investments has been companies which invested large amounts of money throughout the downturn,” he said. “Ocado Plc, Booker Group Plc, Rightmove Plc, easyJet Plc, Ashtead Group Plc – all these names have one common denominator and, that is, they were actively investing in the market throughout the most difficult times. So consequently, when the markets started to recover, they had a good self-help story and started to take market share.”