Shares in Carsales.com Limited (ASX: CRZ) have been sold off quite heavily in recent months as the stock got caught up in the 'tech-stock sell-off'. After hitting a high of $12.61 in March, the shares have since retreated almost 17% to just $10.49, giving you the opportunity to buy while they're travelling in the slow lane.
Although the stock has been volatile, here are three solid reasons you should hold on for the ride…
- Strong growth. The company delivered an incredible half-year report earlier in the year which revealed a 17% gain in net profit after tax (NPAT) to $43.9 million as well as a 10% increase in revenues from ordinary activities, which rose to $112.3 million. The company's margins will continue to improve as more customers utilise the service.
- Dominance. Carsales.com is like the SEEK Limited (ASX: SEK) or the REA Group Limited (ASX: REA) of the car industry. More and more buyers and sellers are going to the website which is creating somewhat of a moat for the business.
- International Expansion. While Carsales.com enjoys a dominant market position locally, it is also expanding its footprint around the globe having acquired a stake in iCar Asia Ltd (ASX: ICQ) and the Brazilian WebMotors. This international expansion could be what drives earnings much higher for years to come.
