Welcome to eBay is for winners stock series.
The complete series features four parts:
The series starts here. Enjoy!
eBay owns a strong portfolio of well diversified businesses and constantly grows its revenue and profits.
That is why I consider eBay – a stock for winners. This is part one of my eBay analysis series.
In August, eBay (EBAY) hit a $23 bottom and has since then surged 42% to $32 a share. What’s so special about the world’s largest online marketplace? They control valuable assets which have lots of room to grow.
eBay owns Paypal, a global online payment account, and Skype, their communications brand name. I’ll talk more about these holdings later, but as you can already see, the company is involved in multiple niche markets. First, we’ll go over eBay.com, the online marketplace that’s taken the world by storm.
Online E-Commerce Heavyweight
eBay operates the #1 e-commerce marketplaces in the world, eBay.com and eBay Express, their newest addition to the trademark eBay label.
eBay’s strength lies all in its gross merchandise volume, the total amount of merchandise sold in the marketplace. Gross Merchandise volume increased 17% in the 2nd quarter accounting for a staggering $12.6 billion while a 26% increase in registered users over the 3rd quarter helped improve the brand name as it continues to attract new customers.
A rise in gross revenue will likely occur as consumers will spend more due to lower energy costs. Their 31% revenue growth rate only has room to improve as long as energy prices stay put.
When eBay revealed a search featured called “Best Match,” critics thought the new search optimizer would annihilate smaller eBay merchants, the majority of eBay’s merchants. The feature hasn’t been added to the site yet, but I believe the feature won’t have a major effect on consumer purchases.
Ebay’s Online Shopping Businesses
Craigslist.com is an online classified ad marketplace where users can post items for sale, browse personals, and find apartment rentals. The best part about Craigslist is that visitors can browse listings by city and state, which creates a network of specified online communities. eBay made a smart acquisition by adding a large classified network site to their portfolio.
Shopping.com is a top ten global e-commerce site that allows visitors to compare relevant items before deciding on a purchase. With over 40 million products online, eBay has grown Shopping.com into a major heavyweight in the online shopping industry. It’s highly valuable because eBay can use Shopping.com as a referring source to their eBay marketplace.
eBay continues to build a strong mix of online e-commerce businesses while consistently growing their core brand name. I like what eBay has done in the global e-commerce world, but there’s even more to reveal. eBay doesn’t stop there; we�ve still got a leading global payment gateway and long distance communications service to dissect. Stay tuned for the Paypal business analysis.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.