Mark Moreland | Teaminvest Co-Founder| ausbiz The Call 12Apr2022: Carsales.Com Ltd (CAR)

One way to alleviate the anxieties brought about by current news on the state of the stock market is to keep close tabs on the companies in your portfolio. Teaminvest co-founder, Mark Moreland talks about whether Carsales.com.au (CAR) can still be considered a Wealth Winner™. #CAR #carsales #stocks #asx #investing #buyorsell #wealthwinner Video Title: Is Now The Time to Invest in CAR? Now, here to interview Mark on www.Carsales.com, the big car sales platform and digital marketplace. Yeah. It's been a quality investment. This is a company that's got, in Australia, it's got very strong moats. A moat meaning, Buffett describes the castle and the moat is the channel around it, you want them full of piranhas and crocodiles. Meaning competitors can't take your business away. So what Car Sales have is a network moat and they dominate the industry, just like REA does. That's another example. Amazon's got a massive network moat. So you usually have one major player. You need space. They get the lion's share of the money that comes in. People think they make their money out of advertising. They actually make their money out of commissions, lead generation. They charge the car dealers, I think, $38 a lead. So when you click on it and say, "Give me the phone number for the car dealer." Ding! $38 off your credit card. That's how they make their money, which is a great model. Right. So great business. Passes all our filters except Return. It's international businesses are growing quite well. It's not a business I've really looked at it. It's definitely a Teaminvest company. I've got some members who are super enthusiastic about it. I just think it's a bit too expensive at the moment. And the returns showing about 4% a year at the current price. So if you wanted 10 on it, and this is a very reliable business, you couldn't pay more than $14.91 to get a 10% on our modeling, but apparently their international businesses and I don't know them in detail, or actually some of them are looking very good. So there's potential upside where the earnings might pick up again. They've got Latin America and Korea, apparently. It's very difficult for Australian companies. You grow at 20% a year compound, in about a decade or 15 years, you're the dominant player in the market. The only choice you've got then is to go overseas. And when you go overseas, this is now not a new concept, you have to buy someone who's probably losing lots of money and then pay big bucks for it. And then it brings down your returns in Australia, unless you can make it work. Right. That's the problem. It's not just them. Good company, too expensive at these levels.