Beleaguered estate agent Countrywide have announced that Investec Asset Management has purchased a 5.6% share in the company, having not held a stake in the company previously.
Snapping up a total of 13.3 million shares, Investec appear to have already made a small profit – they bought the shares at approximately 112 pence and at time of writing the stock stands at 116.50 pence per share.
That would provide the investor with a profit in the hundreds of thousands already, with their total ownership coming in over £15 million.
Countrywide’s share price remains at a near all-time low, peaking in 2014 at a chunky 686 pence per share. That golden era seems like a long way away, especially for management: board tensions and resignations were followed by a stunning 98% collapse in profits this year.
Do Investec know something we don’t, or are they calling the bottom of the estate agents slump?
Either way, DMZ have long argued that agency behemoths such as Countrywide are hugely undervalued when taking into account their size, average profitability and business proposition.
Online and hybrid models are taking off, but they currently represent no more than 5% of the total agency market with predictions/aspirations to move to a 35% share within the next 5 years.
That still leaves hundreds of millions of pound in commissions available for traditional agents. Even if you view Countrywide as a cigar butt investment – it might be worth taking those last few puffs.
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