Investors should regularly keep up with the changes in the stocks they own, not just twice a year when reports come out. A little time every week for each stock in your portfolio is all that is needed. Then, when changes happen, you will have a sense of their importance.
It may help keep you out of trouble when bad news comes. You’ll be able to judge whether it is a temporary situation or one that could damage the company’s business model.
Here are three stocks that are making moves, either for future growth or to correct a problem.
Online car sales listing website Carsales.com Limited (ASX: CRZ) made some bold moves by investing in international growth. The company lit up investor interest with a 49.9% investment in the online assets of South Korea’s largest car sales listings website SK Encar.
The $126 million acquisition will be in a newly created company called SK Encarsales.com, with SK C&C, the owner of SK Encar, retaining a 50.1% stake.
CEO and managing director Greg Roebuck talked about the acquisition. “With Korea joining interests in Brazil, Malaysia, Indonesia, Thailand, China and New Zealand, Carsales has a significant and growing international portfolio.”
This followed the company raising its stake in Icar Asia Limited (ASX: ICQ) from 19.9% to 22.9%. This company has car listings websites for Malaysia, Indonesia and Thailand. An expansion into South East Asia will be important for keeping Carsales.com’s growth momentum going.
Carsales.com’s share price recovered back up above $11, where it was in October 2013.
QBE Insurance Group Ltd (ASX: QBE), the $15.5 billion insurance company, hit a low of almost $10 a share in December when it announced it expected a net loss of around US$250 million for FY2013. Claims provisioning and writedowns in the US were mostly the cause.
It had a cash profit of $761 million, down from $1.04 billion in FY2012. Its insurance profit margin was 10.6%.
Across FY2014-FY2016, its North American business is targeting significant margin improvement. It intends to stabilise earnings in FY2014 to position itself for profitable growth while it rebuilds the business. This is the kind of situation when the company will cut costs and review its business structure to become a leaner, more efficient business.
Employment listings website Seek Limited (ASX: SEK) still holds the title of market leader. According to the company, it is involved in about 25% of Australian job placements and has about 30-million monthly visits from job seekers.
It sees the opportunities of expansion in South East Asia, with the region’s large population. It has 100% ownership in a jobs website called JobsDB, which offers employment listings in more than six Asian countries.
In February it announced it was acquiring 100% of Singapore based JobStreet, an employment listings website. It will be combined with JobsDB under its Seek Asia subsidiary. JobStreet operates in Malaysia, the Philippines, Singapore, Indonesia and Vietnam.
Andrew Bassat, CEO and co-founder of SEEK explained: “This transaction is a continuation of SEEK’s focus in Asia (including China). In the near term, we expect revenue residing in Asia to comprise over 50% of SEEK’s overall revenue which further cements SEEK as a global leader in online employment.”
Seek and Carsales.com can leverage their expertise and technology in highly populated countries. To remain fast growers, they are moving to where the action is.
QBE has to reshape itself, but as it focuses on its core businesses and improves earnings and efficiencies, investors can follow the progress. They can be in on the ground floor of the restructuring.
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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.
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