Onthehouse Holdings Ltd: Should you buy, hold or sell?

It was a subdued reaction to the release of results from Onthehouse Holdings Ltd (ASX:OTH).

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Most investors would be aware of the extraordinary fortunes created by successful internet companies. While global companies such as Google Inc and Facebook Inc no doubt spring to mind, domestically on the ASX we have our share of winners too.

Take for instance online real estate classifieds businesses REA Group Limited (ASX: REA) and iProperty Group Ltd (ASX: IPP). These two businesses have done wonders for the bank balances of some savvy investors clever enough to jump aboard early and hang on for the journey.

In the case of REA, over the past 12 years the stock has enjoyed a mouth-watering share price appreciation of 17,100%. The gains in iProperty's stock haven't been too shabby either, with shareholders enjoying gains of 1,000% since September 2007.

Returns like these make Onthehouse Holdings Ltd (ASX: OTH) – a business which operates online real estate content and a services platform for real estate agents – an attractive stock to consider.

For the interim results just released, Onthehouse recorded flat revenue of $13 million and a decline in underlying net profit after tax to just $93,000. That wouldn't appear to be figures to get excited about, but the potential remains…

As the newly appointed Managing Director stated: "Onthehouse is uniquely positioned with a stable Real Estate Solutions business, and the earlier-stage Consumer Online division that has substantial upside."

The key asset from a growth perspective for investors is the group's onthehouse.com.au website. This portal is currently the third largest real estate platform in Australia and is attracting over 1.8 million unique visitors per month.

That's a BIG number!

The key question investors need to answer is whether these viewer eyeballs can ultimately be converted into profits. If they can, then Onthehouse – which currently has a market capitalisation of $45 million – could be worth significantly more and follow in the footsteps of its peers.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned.  

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