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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Auto Trader - Trading ahead of expectations

December 2019

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • AUTO
  • Price:
  • 535p
Interims were ahead of expectations for Auto Trader, owner of the UK’s largest digital automotive marketplace. Revenues were up 6% to £187m, with pretax profit rising 12% to £128m. As a purely online operator it has no overheads from running a physical store estate and operating margins climbed to an amazing 70% (up from 68% in H1 ’18). Eps grew 14% to 11.1p. Continued strong cash generation saw net debt / EBITDA fall to 1.1x even after returning £70m to shareholders through share buy-backs (£27.2m) and dividends (£42.6m).Its main division, Trade, grew sales 8% to £162m, driven by a 1% increase in the number of retailer forecourts advertising through it to 13,316, while average-revenu ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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