The fall out from last Friday’s trading updates from Nine Entertainment and Fairfax Media ahead of the release of the documentation for their planned takeover deal continued to batter the media sector yesterday on the ASX.
Given the choice most people would prefer the stocks they own to go up in a steady fashion, avoiding any volatility in the meantime. But when you have invested in high quality companies with wonderful prospects, any volatility should be viewed as friend rather than foe. Shares in REA Group (ASX: REA) have been a case in point this year.
UBS found the first half impressive, although believes the confirmation that growth is set to slow has probably driven underperformance in the share price. Moreover, this could suggest earnings risk in FY20.
Despite a slowing residential property market, Morgans has calculated that the company is continuing to grow volume in paid depth ads. The broker expects REA Group to sail through the current slump in residential property markets and meet expectations for the first half.