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right alignment (LSE: RMV) may be the best stock FTSE100The company is in great shape and will continue to return cash to investors over the long term.
Rightmove’s stock is down 30% in 2022.
As a result, I think the company’s stock is worth more than it was in early 2022. Today’s price looks like a buying opportunity to me.
Mr. Market Rightmove’s earnings last week were unimpressive. Stocks fell slightly on Friday as the FTSE 100 rose.
The company reported £333m (compared to £305m in 2021) despite rising inflation and a slowdown in the UK housing market. Earnings per share were 23.4p (up from 21.3p).
Time spent by users on the platform was above pre-pandemic levels. The company also returned £198m to shareholders through dividends and share buybacks.
Rightmove is currently in the process of changing its CEO, with Johan Svanström replacing Peter Brooks-Johnson. This is probably the biggest risk in stocks today.
A change in management can be disruptive for a business, and this is something investors want to watch out for. But the new CEO is taking over the business in a strong position.
Rightmove has a competitive position with no debt, low operating costs, and less disruption. All of this makes for a solid company to take over.
10% earnings growth may not seem like a big deal for a stock that trades at $1. Price Earnings Ratio (P/E) But the company has at least three ways to boost earnings per share.
The first is to raise prices for advertisers. Rightmove’s user base provides homebuilders and realtors with the platform and pricing power they need.
In its report, the company said its average revenue per advertiser increased by 11% year-over-year. Despite this, the number of advertisers has changed little.
The second is to expand into different markets. Rightmove has developed and grown a commercial real estate and international listings platform.
2022 was a good year for both. The commercial real estate platform grew 19% and the international listings platform grew 21%.
The third is share buybacks. A buyback reduces the total number of shares. That means each remaining share makes a bigger claim to the company’s overall earnings.
In 2022, Rightmove’s share repurchase reduced its outstanding shares from 859 million to 835 million shares. Management reiterated its promise to buy back more of its shares in the future.
stocks to buy
Looking at Rightmove’s P/E ratio, the stock may look expensive. But I think it has the best growth prospects of the FTSE 100 stocks.
Combined with the inherent strength of the business, this makes equities attractive. So I think you can buy it at the current price.
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