Shares of online automotive classifieds business Carsales.Com Ltd (ASX: CRZ) find themselves down 31 cents or 3.1% today which compares to a 0.3% decline for the benchmark S&P/ASX 200 (INDEXASX: XJO).
With the shares having fallen roughly 15% since their peak last month, investors are being presented with an excellent opportunity to rev their engines. Here are three solid reasons why you should consider buying today…
- Business moat. Legendary investor Warren Buffett looks for what he calls a wide "moat", or a sustainable competitive advantage, when he buys businesses. As more users go to the website to buy and sell (and compare) their vehicles, it will become increasingly difficult for competitors to steal market share.
- Margins. One of the most attractive things about Carsales.Com is that most of its costs are fixed. This means that as its customer base expands, its operating leverage will continue to improve which will help boost earnings.
- International Expansion. While the company enjoys a dominant market position locally, investors who buy in early can also benefit as it expands its footprint (or tyre marks) overseas. Having acquired a stake in iCar Asia Ltd (ASX: ICQ) and the Brazilian WebMotors, Carsales.Com is in an excellent position to continue growing through the operation of overseas websites.
Carsales.Com is one of Australia's leading tech stocks and I expect its shares to continue climbing strongly over the coming years. However, there may be an even better bet for your money.
