Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, July 6th.
Zillow Group Inc. (ZG)
The fourteenth pick of the Let’s Be Millionaires investment series goes to Zillow Group Inc. (ZG).
Zillow Group, better known as just Zillow, is a website/online real-estate database company. The website has over 110 million homes in the United States listed. Zillow was founded by former Microsoft execs and follows a business model that I am a huge fan of as an investor.
In a nutshell, Zillow provides a way for its visitors to search for and find properties in an area and for helping to make that all possible the sellers of the property pay Zillow a fee. Essentially Zillow makes money on the sale of homes without even having to own or broker the homes. Sounds almost as glorious as how AirBnB makes money off of people renting their places out without having to own a single rental property.
Check out the Zillow website here.
Check out the Zillow Investor Relations Page here.
About The Stock
ZG stock has been having a good year. The stock is up 46% year to date, having started the year valued at around $42 a share and now trading for roughly $62 after setting an all time high at $65 a share. A previous all-time high of $53 was set back in July of 2014, after which the stock entered a downtrend eventually bottoming out at around $18 a share in early 2016. Investors who bought in back then have enjoyed a nice nearly 250% gain over the course of the past 28 months.
Zillow has a P/E ratio of 126 making it quite expensive from an earnings prospective but anyone buying this stock is doing so because of speculation on future earnings. The company also has a market cap of 8.2 billion dollars making it a mid cap stock
This stock would be categorized as a real-estate, growth, mid-cap stock.
The speculation here is pretty straightforward: I like Zillow’s business model and they have so much going for them. Last year their website had over 6.3 billion visits. They have the size to command a spot at the table when it comes to getting paid for sales because with that many visitors you are really hurting your visibility as a home seller if you are not listing your home on Zillow.
I think Zillow stock will keep going higher and that they will continue to make strategic partnerships that allow them to tap into even more revenue streams. The management has been doing well and they recently went back to the market to get $750 million more of funding so to me that is just a flashing sign that says “big moves being made.”
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