Earlier today I looked at a couple of small cap shares that have been tipped as buys. You can read about those here.
But if small caps are too high up on the risk scale for your investment tastes, then you might want to take a look at the blue chip share listed below. This is because blue chip shares generally carry much less risk than small caps and are therefore arguably more suitable to the conservative investor.
Which blue chip?
The blue chip in question on this occasion is SEEK Limited (ASX: SEK).
It is of course the leading job listings company in the ANZ region with its seek.com website. In addition to this, the company has a number of similar businesses around the world and an investments business.
SEEK has been performing very positively in FY 2021 thanks to Australia’s impressive economic recovery from the pandemic. This led to the company recently upgrading its full year guidance for FY 2021.
Pleasingly, with Australia’s unemployment rate tipped to continue reducing over the coming years, job advertisement volumes are expected to rise. Combined with the removal of discounts, price increases, and further depth product penetration, this bodes well for its growth prospects.
Particularly given its incredibly strong market position. For example, at the end of December, SEEK ANZ had 16 million candidate profiles, 35 million monthly visits, and 160,000 active hirers. This led to the company having five times more placements than its nearest competitor.
Recent broker upgrade
One broker that is a big fan of SEEK is Macquarie. Earlier this month, the broker upgraded the company’s shares to an outperform rating with an improved price target of $40.00. This compares to the latest SEEK share price of $32.61.
It believes the company is well-placed to benefit from ad volume growth and a tight labour market.
Macquarie expects the Australian unemployment rate to fall from 5.5% to ~4% during 2023, underpinning a 25% increase in job ad volumes in FY 2022.