" Who would have thought" an IT firm with a simple platform selling used vechicles can continue growing profits at 35%? Can it keep going? I reckon FY12's EPS will grow 25%. 1) Business very strong in 1st 6 weeks FY12. 2) Where else do you sell a used-car/boat/trailer/truck etc these days? 3) As website matures and demand for innovation declines, company can cut costs significantly. Doesn't require huge staff numbers to run this company. 4) No capex, no stock.... just a website in cyberspace. Such a simple business model easy to analyse. 5) Look for company to do another 10% share buyback. What else can they spend their huge cashflow on... apart from a special dividend? 6) But most of all it's the 300% growth in mobile-phone usuage that caught my eye. Gen Y adore their phones. It's cool for them to get alerts for cars they'll never buy whilst chatting with babes. Too bad it costs them 30c a pop... whilst cost to company about 1/100th that!
Hence, i expect divs will grow by 25% in FY12 and again in FY13. Probably slow after that, but buyback drives EPS relentlessly.
CRZ Price at posting:
$4.67 Sentiment: Buy Disclosure: Held
