Opinions
The Panic-Proof Portfolio (Stockchase Research)
eBay Inc
EBAY-Q
TOP PICK
Nov 19, 2020
Stockchase Research Editor: Michael O'Reilly EBAY trades at a 19x PE and a forward PE of 7x -- making it one of the cheapest e-commerce online companies out there compared to a sector average 31x. They are on track to post another year of 20% increases in annual earnings. Millennials seem to be gravitating towards the direct sales model. It pays a reasonable dividend backed by a 6% payout ratio. We would buy this with stop-loss at $44, looking to achieve $63 -- over 25% upside. Yield 1.32% (Analysts’ price target is $62.48)
$49.530
Stock price when the opinion was issued
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PAST TOP PICK
(A Top Pick Apr 15/21, Up 47.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with EBAY is progressing well. We now recommend trailing up the stop (from $49.50) to $65.00. If triggered this would all but guarantee a investment return over 29%, when including the previous recommendation to cover half.
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PAST TOP PICK
(A Top Pick Nov 19/20, Up 51.6%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with EBAY is progressing well. We now recommend trailing the stop (from $65) to $70. If triggered, this would all but guarantee a net investment return of 34%, considering our recommendation to previously cover half the position.
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PAST TOP PICK
(A Top Pick Nov 19/20, Up 41.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with EBAY has triggered its stop at $70. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 34% when combined with the previous recommendation to cover half the position.
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TOP PICK
Stockchase Research Editor: Michael O'Reilly The online sales platform of EBAY is rightly valued now and is selected as a TOP PICK. Trading at 10x earnings, compared to 13x for peers and under 3x book, its strategy for streamlining operations will help improve its earnings going forward. It pays a nice dividend, backed by a payout ratio under 25% of cash flow. We recommend setting a stop loss at $35, looking to achieve $65.50 -- upside potential over 50%. Yield 2.08% (Analysts’ price target is $65.23)
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WEAK BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
EBAY has been trending up nicely over the last year, gaining 49% and paying a yield of 1.69%. EBAY is also quite cheap at a 12.6x forward earnings valuation. Growth outlook is not exciting, expecting revenue growth of 2-3% annually and mid-single digit EPS growth. Recent quarterly results have seen strong EPS growth. Our prior comments are relatively unchanged. We think it is a high cash flow, mature value stock and would not expect it to continue delivering over 45% returns.
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