Let’s get straight into the point of this article: of all the smallcaps in the Telecommunications index, The Market Ltd (ASX:MKT) (“The Market”) could be one of the most overlooked.
Case in point: it owns the two largest online investment communities in Australia and Canada.
In fact: its well-known Australian forum, HotCopper – through being a centralised hub for Australian traders to discuss their investments, and company announcements – regularly helps to make or break mining juniors.
In this way, HotCopper shapes our local share market. The same is true for its counterpart Canadian offering, Stockhouse.
And HotCopper, it can’t be ignored, is miles ahead of all competition.
In fact, it’s ahead of multiple competitors combined.
Quick disclaimer here: I write for HotCopper, but I thought it was about time I looked closely at the company that pays my bills.
HotCopper’s stats are mind-boggling
And this is what first caught my attention when I took the job.
Get this: according to data from web analytics company Similarweb pulled in late September, HotCopper clocks in 7.015M monthly visits.
Nationally recognised finance media brand Stockhead, meanwhile, only pulls in 281.4K visits per the Similarweb analysis this finance journalist has seen.
And that’s just visits. When it comes to page views, HotCopper is currently raking in 43.09M views – driven in large part by its collaborative chat-forum design.
Stockhead, not to be too disparaging, only pulls in 501K per month.
The Market’s Capital Markets division owns HotCopper, Stockhouse (HotCopper’s equivalent in Canada), The Market Online (formerly known as The Market Herald) and The Market Link, which is the investor relations operator.
But The Market offers far more than stock market forums and services.
The Market Ltd’s truly a diversified communications company – you may or may not know that it owns Australian e-classifieds success story Gumtree. The Market also owns Carsguide & Autotrader – together, these three entities form the Gumtree Group arm of the business.
Let’s take a look at each of the brands that make up Gumtree Group.
Inspecting Gumtree, Carsguide & Autotrader
Gumtree Group, as all three companies put together, collectively see more than 5M unique users interact each month – that means 20 per cent of the Australian population visits its three sites on a monthly basis.
Last financial year, the classifieds website Gumtree alone received over 350M page views per month. Like MKT’s capital markets division, Gumtree Group clearly boasts some of Australia’s most high-traffic websites, period.
According to The Market’s most recent annual report, Gumtree’s annual listed Gross Merchandise Value (GMV) equalled an eye-catching A$30B. Key categories of cars, jobs, pets, home & garden and real estate attained some 2M listings.
As technology evolves, so the nature of Gumtree Group is changing.
Over the past year Gumtree launched its first transactional offerings with the roll-out of an Instant Cash Offer product and a Car Inspection service.
The Market’s CEO Tommy Logtenberg promises additional transactional products are on the cards – with launches in coming months with a focus on payments and shipping.
“This will provide us with a sound monetisation opportunity and further strengthens our trust and safety capabilities,” Mr Logtenberg said.
Vehicle sales are an important component of the overall brand. Over 2,500 car dealers nationally use Gumtree Group – Gumtree itself, as well as Carsguide and Autotrader – to market their products to the Australian populace at large.
Carsguide ranked the #1 website in Australia per Nielsen ratings (Jan-August 2024) for automotive editorial, which combines listings, advice, reviews and auto news.
Monthly page views amount to 18M for Carsguide alone.
And Gumtree Group’s activities in the real estate sector are also on an upward trajectory.
Gumtree recently announced a partnership with the Homely Group in its real estate category, which is anticipated to go live in November 2024.
“Through this partnership, the total number of real estate listings on Gumtree across both for sale and rentals will grow significantly, from nearly 11,000 to around 200,000 nationwide,” Mr Logtenberg said.
Given this impressive portfolio of online brands – and the untouchable superiority of HotCopper as a magnet for finance-media-hungry web traffic – it’s perhaps surprising, then, that the stock remains highly illiquid. It’s tightly held.
But with RBA rate cuts on the relatively immediate horizon and a slowly recovering US IPO market – the megatrend of private equity be damned – are investors missing a good opportunity while shares are cheap?
Telecomms lacks ‘sex appeal’ for many
Of all the sectors on the ASX, Telecommunications – which includes media companies – is one of the most esoteric.
You already know the big market cap names – mainly Telstra – but I’m willing to bet aside from one or two little darlings, you can’t name many others.
But it’s well worth recognising the sector is far more than a national phone service provider and a few TV stations.
It’s a rich and often overlooked segment of the Australian share market’s overall composition – at least compared to mining, property, healthcare and finance – which is perhaps strange given it’s one of the most important sectors for Australian society.
Or any society. Consider this.
Our national broadcasters sway public opinions and help to evolve the current political mood(s) of our time.
Telstra, meanwhile, connects vast swathes of the country – in many cases, providing the infrastructure required for that media to be broadcast onto phones.
Telecomms matters – but, from time to time, it can feel like many share market traders overlook the sector in favour of sectors that might come more obviously to the forefront of the mind, given we’re a country of ore and expensive houses.
But in that binary way of thinking, there’s possibly a lot of potential value that could be missed.
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