Seeking returns with Seek

With the Australian recruitment cycle currently near the bottom, Seek’s FY14 results illustrate its market-leading position. I remain bullish on SEK.

Source: Bloomberg

Signs are emerging that employment ads and employment demands are on the up, which is only going to lead to volume and revenue increases in FY15.

There are three reasons I remain bullish on SEK.

Firstly, because of offshore exposure. SEK’s operations in southeast Asia, China and Latin America are set to deliver double-digit growth in FY15. The company’s purchase of Jobstreet will become accretive and begin adding value this year. This will also lead to further deleveraging of the balance sheet on the growth in these regions.

Secondly, due to SEK’s investment drive and organic growth profile, along with its acquisitions. The company is moving into education, a service with excellent exportability. The domestic pick-ups in services have been highly promising, and SEK is posed to roll these out to other markets.

Lastly, the stronger balance sheet will lead to stronger shareholder returns. With the current pullback impacting all sectors and stocks, this return is only going to increase on a percentage basis.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.