REA has corrected 42% from its mid-2021 high and is currently down 35% for the financial year after finding itself in two unpopular naughty corners i.e. property and high valuation growth names. This is a quality almost monopolistic style business with some useful pricing power but it currently is in the wrong place at the wrong time, the question is when has real value been restored – its still not cheap per se trading on a Est. valuation of 35.2x for 2022 but a little lower and it will become compelling although I would add that MM has no interest in increasing our tech exposure even though we anticipate a bounce from current levels.
MM likes REA into weakness under $100
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