Seek (ASX:SEK) share price lifts as jobs ads reach 12-year high

Here's why the SEEK Limited (ASX: SEK) share price might be getting a boost today. (Hint: It might have something to do with more job ads).

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published April 6, 2021 3:48 pm AEST

The SEEK Limited (ASX: SEK) share price is continuing its upwards trend today following the release of Australian job advertisement data for March. At the time of writing the job marketplace provider's shares are trading 3.16% higher at $29.75 a share.

Woman using laptop for job search — Image source: Getty Images

Highest Job ads since post-GFC

On a day for good news, the Australia and New Zealand Banking GrpLtd (ASX: ANZ) reported another strong gain in job ads for the month of March. Reportedly, job advertisements in Australia increased by an additional 7.4% month-on-month, or 39.7% compared to this time last year.

As a result, job ads have hit a 12-year high – with the number reported not seen since November 2008. At that time Australia, and the world, was climbing out of the global financial crisis (GFC). Twelve years later, the world is clambering to recover from a crisis of a different kind – although economically the fallout is comparable.

The positive monthly growth makes for the tenth month of consecutive increases in job ads. A figure that has SEEK shareholders smitten, as the share price continues to exceed pre-COVID-19 levels.

SEEK share price and job ads break pre-pandemic levels

At 190,542 ads, positions looking to be filled have now exceeded pre-pandemic levels by roughly 52% when compared to January 2020. Unsurprisingly, SEEK and its share price have come along for the ride, being Australia's number one employment marketplace.

A year on from a drastic 42% crash, the SEEK share price has now gained 108% in the last 12 months. Prior to the pandemic, the company's share price hit an all-time high of $24. As of today, the company's shares are trading 24% beyond that previous high.

Although job ads might be growing, the prior half remained challenging for the company. Group revenue lagged 6% compared to the prior corresponding period, while net profit after tax slumped 8% to $69.7 million.

A promising sign for unemployment

Job ad data in conjunction with the Reserve Bank of Australia's (RBA) commentary remains optimistic for unemployment. This afternoon the RBA maintained the cash rate at 0.1%. Adding that Australia's economic recovery has been stronger than expected with unemployment falling to 5.8% in February.

High job ads and a falling unemployment rate are certainly promising indicators for a healthier job market looking ahead. Given the prosperity of the job market is closely tied to SEEK's share price success, this might have a bit to do with the recent lift.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.