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Jim Cramer Recommends Both Match Group and Rival Bumble, Calling the Latter the ‘Superior Growth Stock’

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Jim Cramer Recommends Both Match Group and Rival Bumble, Calling the Latter the ‘Superior Growth Stock’

After the dating service Bumble made its market debut Thursday, CNBC’s Jim Cramer compared its business performance to its main rival, Match Group, and offered his recommendations on their stocks.

Bumble, which came public with much fanfare to rally more than 63% on its first day, includes the Europe-based Badoo dating site in its umbrella. Match Group, which was spun off last summer from media holding company IAC, has a larger portfolio that includes Tinder, Hinge and OkCupid, among other connection services.

Their businesses, however, should serve different purposes for investors, Cramer said.

“They’re both great companies. I think they’ll have tremendous numbers in the second half, they just fill different roles in your portfolio,” he said on “Mad Money.”

Bumble, which was launched in 2014 by Whitney Wolfe Herd, was priced at $43 before it began trading under the ticker symbol “BMBL.” It held a $13 billion market value at the close with a share price of $70.31. Match Group commanded a market cap of $45.8 billion at the close.

Bumble is the faster grower of the two competitors, based on figures in its S-1 filing. In 2019, the company said total revenues were $488.9 million, up nearly 36% from $360.1 million in 2018. As for the pandemic-plagued year of 2020, Bumble reported total revenues of $416.6 million through the first nine months ending Sept. 30, $40 million of which it said was generated between Jan. 1 and Jan. 28.

When compared with same nine months in 2019, when total revenues came in at $362.6 million, Bumble saw its business grow 15% amid the pandemic.

As for Match Group, the company posted full-year 2020 total revenues of $2.4 billion, which was up 17% from 2019. Its revenues grew 19% in 2019 from 2018, Cramer noted.

“If you’re a growth-oriented investor, Bumble’s the way to go,” Cramer said. “Even after today’s incredible run, it’s the superior growth stock.”

Bumble has a much smaller reach than Match. In its prospectus, Bumble said it had 42 million monthly average users in the third quarter and 2.4 million paying users through September of last year.

Match reported having almost 11 million average subscribers in the fourth quarter of 2020, representing a 12% year-over-year improvement.

Bumble and Match executives are hoping to continue expanding their online dating businesses, with the former building products for platonic matchmaking and networking services.

A key difference between the enterprises is that Match is profitable, while Bumble is still a money-losing enterprise with margins that are improving, Cramer highlighted.

“If you’ve got a more cautious approach to the market and you still want an online dating stock, Match is the way to go,” Cramer said.

Match shares, which closed at a record $172.13 Thursday, are trading at 16 times this year’s sales estimates, a valuation that Cramer said was far too cheap for a company with 17% growth.

Based on FactSet estimates, Match is projected to produce sales of $2.8 billion this year and $3.31 billion in 2022.

“People are paying up [for Match] because they expect the numbers to explode once we reopen,” Cramer said.

Bumble is selling for 17 times sales, he added. The company is forecast to record full-year 2020 sales of $580 million, $723 million in the current year and $897 million in 2022, according to FactSet figures.

“In other words, they look very similar on a price-to-sales basis, even though Bumble’s growing twice as fast as Match,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Bonds

FG To Auction Three Bonds Worth 50B Each This Week

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Bonds- Investors King

The Debt Management Office has said that the Nigerian government will offer N150 billion bonds for subscription in June.

The bonds comprised three bonds worth N50bn each, a circular said Friday.

The DMO said the bonds will be auctioned on June 23 and all three have the same date for settlement.

The bonds are a 10-year re-opening bond to be offered at the rate of 16.2884 percent and to mature in March 2027; a 15- year re-opening bond to be offered at 12.5 percent with the maturity date of March 2035; and a 30-year re-opening bond to be offered at 12.98 percent and mature in March 2050.

FGN Bonds are “backed by the full faith and credit of the Federal Government of Nigeria”, the DMO said, adding that they are equally charged upon the general assets of Nigeria.

The debt office explained further that FGN bonds qualified as liquid assets for liquidity ratio calculation for banks.

For re-openings of previously issued bonds where the coupon is already set, the circular said successful bidders would pay a price corresponding to the yield to maturity bid that cleared the volume being auctioned, plus any accrued interests on the instrument.

Last month, the DMO offered similar bonds of N150bn bonds for a subscription which comprised three bonds worth N50bn each.

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Stock Market

NGX Suspends Trading in GTBank’s Shares Ahead of Guaranty Trust Holding Listing

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GTBank -Investors King

The Nigerian Exchange (NGX) Limited last Friday placed a full trading suspension on the shares of Guaranty Trust Bank(GTBank) Plc.

According to the NGX, the suspension was necessary to prevent trading in the shares of the bank in preparation for the eventual delisting of GTBank to pave way for the listing of the holding company(Holdco), Guaranty Trust Holding Company Plc on NGX.

Shareholders of the GTBank had ratified the plan to adopt a Holdco structure and the Group Managing Director of the bank, Mr. Segun Agbaje, had told them the development would see a new corporate entity, Guaranty Trust Holding Plc, take the place of GTBank on the London and Nigerian Stock Exchanges.

He explained that change would entail a 1:1 share transfer while the Holdco would serve as the parent company and corporate center for GTBank Nigeria, all GTBank African subsidiaries and all other new businesses that will be created following the transition.

“Our transition into a Holdco is a necessary step to future-proofing our leadership position, sustainably growing our earnings and achieving our long-term goal of becoming one of the top five financial institutions in Africa. It is also a critical part of our response to the seismic shifts in customer expectations and changes in business models,” Agbaje had said.

He noted that as a Holdco, they will compete more effectively with non-banks in the new competitive landscape; pairing their strength in financial services with an aggressive focus on creating value in every aspect of their customers’ lives.

“We will create a new payments business to deliver the innovative solutions that will deepen and extend digital financial services across Africa. We also believe that we are in a better position to drive an asset management business and a pension fund business, given our strong retail base and digital-first approach to financial services, which we have honed over the past decade. Taken together, our entry into these new growth areas will allow us to maximize our potential in a way that banks were restricted from and enhance the value we create as a platform for enriching lives,” he said.

According to him, following a decade of birthing innovative ideas and nurturing them into businesses, the Holdco structure would he bank to unleash the power within, in ways that allow us to thrive in spaces banks were excluded, build out the full value of the innovations they have nurtured over the years and deepen the value we can create stakeholders.

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Nigerian Stock Exchange

Presco Plc to Hold Emergency Meeting to Recommend Acquisition of Private Company to Shareholders

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Presco Plc - Investors King

Presco Plc, an agro-industrial company, has notified shareholders of the company, the Nigerian Exchange Group and the investing public that the Board of Directors of Presco Plc will hold an emergency meeting on Thursday 24th June, 2021 to recommend for the shareholders to consider the acquisition of an existing private company through shares.

The existing private company, according to a statement signed by Patrick Uwadua Esq., Company Secretary, Presco Plc, is in the same line of business with Presco Plc.

Presco said once considered, a resolution will be passed at the company’s next General Meeting to authorise the acquisition of all the shares of the existing private company.

Meanwhile, the company commenced its closed period on today, Wednesday 16 June 2021 until 24 hours after the decisions taken at the Board Meeting are released to the public.

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