SEK rallied throughout Thursday, fighting the tide as the market surrendered the majority of its early gains; the online employment stock outperformed the market finishing the day up +2.6%. We regard SEK as a quality business, but it hasn’t figured on MM’s Hitlist due to lacklustre returns from overseas expansion, the weakening labour market and concerns that the RBA could again lift interest rates. However, this week’s CPI has dispelled the rate fears, and the stock has “popped” accordingly. A few rate cuts may stabilize the employment market, but we are not convinced it’s going to turn it around in a rapid fashion. Also, we are a little concerned that social media platforms are making inroads into the more expensive SEEK platform offering; hence, it is unlikely that MM will buy SEK in 2024.
- We can see SEK recovering back towards the $27 area, or 20% higher, assuming inflation remains under control.
MM is cautiously bullish SEK ~$22.50
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