The REA Group Limited (ASX: REA) share price has continued its positive run and pushed higher again on Wednesday.
So much so, the property listings company’s shares hit an all-time high of $108.30 this morning.
Why is the REA Group share price at an all-time high?
Investors have been scrambling to get hold of REA Group’s shares in recent months thanks to its resilient performance in FY 2019 and improving conditions in the housing market.
In respect to the former, last month REA Group revealed an 8% increase in full year revenue to $874.95 million and a 6% lift in net profit from core operations to $295.5 million despite the housing market downturn.
The main driver of this growth was its Australian business. Australian operating income increased by 8% to $826.3 million thanks to the positive performance of its residential property and online advertising business.
In light of this, I can’t say I’m surprised to see investors snapping up its shares after positive housing market data was released by the Australian Bureau of Statistics this month.
That data revealed that the value of new loans issued to households increased by a sizeable 3.9% to $32 billion in July. This was the biggest increase in almost five years and could be a sign that the downturn has come to an end.
This would be a big positive for REA Group, as it could lead to a major lift in listings volumes. Which, combined with new revenue streams and prices increases, could mean the company is at the start of a major upgrade cycle over the coming years.
Should you invest?
With its shares up approximately 45% in 2019, they certainly aren’t the bargain buy that they were nine months ago.
And while better entry points may emerge in the coming months, I still see a lot of value in them for investors that are prepared to make a long-term investment.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended REA Group Limited and SEEK Limited. 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 Scott Phillips.
- Earnings season: What to expect from the Qantas FY 2020 result – August 3, 2020 6:13pm
- Where to invest $20,000 into ASX shares right now – August 3, 2020 5:18pm
- Beat interest rate cuts with BHP and this ASX dividend share – August 3, 2020 4:52pm