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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Auto Trader - Operating margins soar 6%

February 2017

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:
  • 400p
Since our August update the shares have closed in on their highs, helped by interims showing revenues and underlying profit rising 11% and 23% respectively to £153.9m and £102.3m. Net debt fell £33.1m to £360m with leverage (net debt / EBITDA) down from 2.2 to 1.8x.Auto Trader is the UK’s largest digital marketplace to buy and sell cars and has three divisions with Trade, which generates subscriptions from car retailers, increasing sales 12% to almost £129m. This was driven by a 36% increase in website visits from prospective buyers, a rise in average revenue per retailer of £179 to £1,526 (H1 2016: £1,347) and a 3% increase in car listings to 439,000. Consumer services, which m ...

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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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