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I bought eBay.
Business:
eBay is the clear online leader in auction business in the world. Revenues and net margins have been growing in a healthy range. This year also revenue is expected to grow around 22-27%. PayPal is growing nicely. New competition is cropping up. Amazon is with its own. But they all lag behind this behemoth. . Skype is gaining market share though not still adding much profit to the company. Expanding internationally and made significant investment in china. Closed its japan division. Bought stubhub recently.
Positives:
Leader in its business. Great management, Meg Whitman team in place. Buying back its shares. Price has come down from 40s and at attractive price now. Weak dollar is contributing to the profit margin.
Negatives:
skype deal is little pricey and it has to show its worth. strengh in dollar may hurt its margins. Though behind, the competition may lead to price cuts and cut in profit margins in the future.
My take:
It is the clear online auction leader with impressive margins and great management in place with strong balance sheet. Consistently improved its revenue and profit margins in the last five years on average and I am looking around 42-45 target price.
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