Most investors will be familiar with the $5.4 billion online employment classifieds operator SEEK Limited (ASX: SEK). In fact, given its dominant domestic market position, it’s hard not to know it!
There are, however, a number of other reasons to admire SEEK apart from its local operations.
Here are four other reasons why SEEK is a top stock.
1. Global leader
As I noted above, most investor will be familiar with the strong position SEEK has built within the Australian marketplace. What investors may not be aware of is that SEEK also operates market-leading online employment classifieds businesses in 14 other countries.
These operations provide shareholders with exposure to 11 out of the 30 largest countries by forecast GDP.
What’s more, this global exposure is an opportunity significantly larger and under-penetrated compared with its Australian and New Zealand businesses.
2. Proven ability to undertake successful M&A
Mergers and acquisitions (M&A) have been a feature of SEEK’s global expansion.
Importantly, the M&A appears to be adding significant shareholder value. According to management, the group has achieved a 400% return on investment from its M&A activities.
Recent deals have included the $104 million acquisition of Brasil Online and topping up its holding in SEEK Asia by 5.5% for $78 million.
SEEK has also been successful in creating shareholder value through capital management initiatives such as the demerger of its international student placement business Idp Education Ltd (ASX: IEL).
3. Past outperformance a guide for the future
While history may not repeat, in SEEK’s case it may rhyme!
SEEK appears to have a solid pipeline for growth as it rolls out its successful Australian business model into much larger and less developed markets.
This scenario provides scope for above average growth and returns to continue for the foreseeable future.
4. New Ventures
Not content to just offer employment classifieds advertising, SEEK has looked to offer services across the employment spectrum.
Initiatives include education services such as SEEK Learning which reported revenues of $42 million in FY 2016 and Online Education Services which grew revenue by 28% to $101 million.
With these ventures still relatively new, there is potential for them to grow significantly.
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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.