As of yesterday's close, over the last 12 months the SEEK Limited (ASX: SEK) share price has been one of the best performing blue chips on the ASX.
During this time the job listings company has outperformed the market with a gain of almost 38%.
Is it time to sell your SEEK Limited shares?
While I think that SEEK is a high-quality company and could potentially have a significant runway for growth thanks to its international business, its core ANZ business is the real breadwinner right now.
In the first-half of FY 2018 the ANZ employment segment delivered earnings before interest, tax, depreciation and amortisation of $112.2 million. This equated to approximately 51% of its total EBITDA.
The problem with this is that there is soon to be a new challenger in the local market in the form of Google for Jobs. It is due to launch here in the near future and I am concerned that it could be a serious threat to SEEK's near-monopoly.
Google for Jobs is a portal that allows users to sort job search results by location, occupation, and company. Although it doesn't compete directly with existing job sites, it allows all sites to list their jobs for free through its portal. This could potentially level out the playing field and send recruiters to lower cost job listing sites or force SEEK into cutting its prices.
I'm not the only one that is concerned about the developments. This morning Morgans downgraded SEEK to a reduce (sell) rating from hold and cut the price target on its shares to $19.07 from $21.07 after looking into the Google for Jobs threat.
While the broker believes that SEEK can see off the threat from Google in the long-term, in the short-term it thinks there could be a drag on earnings.
In light of this, I am considering selling my SEEK shares when trading rules allow, to reinvest elsewhere in the market. I have my eye on growth shares such as BWX Ltd (ASX: BWX), Aristocrat Leisure Limited (ASX: ALL), and Webjet Limited (ASX: WEB).
