Could the SEEK share price be heading higher?
The post Is the SEEK (ASX:SEK) share price in the buy zone for blue chip investors? appeared first on The Motley Fool Australia. –
Earlier today I looked at a couple of small cap shares that have been tipped as buys. You can read about those here.
But if small caps are too high up on the risk scale for your investment tastes, then you might want to take a look at the blue chip share listed below. This is because blue chip shares generally carry much less risk than small caps and are therefore arguably more suitable to the conservative investor.
Which blue chip?
The blue chip in question on this occasion is SEEK Limited (ASX: SEK).
It is of course the leading job listings company in the ANZ region with its seek.com website. In addition to this, the company has a number of similar businesses around the world and an investments business.
SEEK has been performing very positively in FY 2021 thanks to Australia’s impressive economic recovery from the pandemic. This led to the company recently upgrading its full year guidance for FY 2021.
Pleasingly, with Australia’s unemployment rate tipped to continue reducing over the coming years, job advertisement volumes are expected to rise. Combined with the removal of discounts, price increases, and further depth product penetration, this bodes well for its growth prospects.
Particularly given its incredibly strong market position. For example, at the end of December, SEEK ANZ had 16 million candidate profiles, 35 million monthly visits, and 160,000 active hirers. This led to the company having five times more placements than its nearest competitor.
Recent broker upgrade
One broker that is a big fan of SEEK is Macquarie. Earlier this month, the broker upgraded the company’s shares to an outperform rating with an improved price target of $40.00. This compares to the latest SEEK share price of $32.61.
It believes the company is well-placed to benefit from ad volume growth and a tight labour market.
Macquarie expects the Australian unemployment rate to fall from 5.5% to ~4% during 2023, underpinning a 25% increase in job ad volumes in FY 2022.
Should you invest $1,000 in SEEK right now?
Before you consider SEEK, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and SEEK wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.