Digital real estate media still taking money off print
Traditional media, as anyone with the slightest interest in the sector can tell you, are under pressure as their revenues migrate to the internet. Owning shares in print and television companies in particular has not been a lot of fun in recent years.
Perhaps it's time for would-be media investors to adopt a new strategy and follow the money to new media. Anyone who has done that by investing in REA Group, which owns the realestate.com.au website and similar sites in Europe and Asia, has been handsomely rewarded.
Over the past 10 months the share price has risen from $12.90 to a high of $29.50 and over five years it has delivered shareholders an average gain of 43.7 per cent a year. One of those shareholders reaping rewards has been Rupert Murdoch, with his News group holding a handy 61.6 per cent of its stock. No doubt that has helped defray some of the revenue losses in his print businesses.
But following such a big run-up, is there still potential for further growth for those who are not on the register? This week's analysis by Robert Brain, a director with the Australian Technical Analysts Association, helps answer that question.
Unusually this week we show three charts, the top one being the price chart, the second daily volume and the bottom, daily trades numbers going back to the beginning of December. The line charts on volume and trade represent eight-day moving averages. Rises in volumes and the number of trades in a stock that is going up can indicate there is strong underlying demand and can presage further rises.
At point one on the chart, on January 8, the number of trades and volumes both went above the moving-average lines, indicating investor interest, but on that occasion it did not push the share price up. From point one to point two, volumes dropped off a bit but on some days trade numbers were higher than the moving average, which crept up a little.
At point three, on March 15, volume and trade numbers spiked dramatically but the share price pushed up only a little and has edged up slightly since then. While volumes have dropped a little in recent times, trade numbers have been strong. All this - as well as reference to candlestick charts - Brain says indicates there is underlying buying support and the stock could move higher.
Anyone wanting to go in at these prices would be wise to put in place a stop loss at somewhere between $25 and $26, levels below where recent buying has pushed the stock. Back on the fundamentals, you won't be buying for the dividend, which is 1.3 per cent fully franked, so traders need to be nimble here.
This column is not investment advice. firstname.lastname@example.org