UK fund manager: Why I’m backing Rightmove

A respected UK fund manager has hailed Rightmove as a key part of his investments to help turnaround the portfolio’s fortunes.

Nick Train, manager of the Finsbury Growth & Income Trust, said Rightmove – along with UK-focused investments such as Experian, Hargreaves Lansdown and Fever Tree - was an example of an undervalued technology stock in the UK compared with US peers.

It comes as Train apologised for recent performance of the investment trust after its share price total return was 2.7% in the six months to 31 March 2024 compared with 6.9% in the FTSE All Share Index.

He blamed this on a lack of opportunity and exposure to technology companies in the UK and highlighted that the fund made a “meaningful investment” in Rightmove in the second half of 2023 due to its dominance in the property portal space and rising revenues despite lower house sales.

Train also saw CoStar’s takeover of OnTheMarket as an opportunity for Rightmove.

He said: “We will see what success CoStar enjoys – others have tried and failed to take lasting share of eyeballs away from Rightmove. 

“But it is startling to note that CoStar, a successful US digital platform business, is valued by US investors at over 60x prospective earnings.

“That is the price you have to pay in a roaring US tech bull market to own equity in a, no doubt, excellent business. 

“Meanwhile, UK investors value Rightmove, also an excellent business, on less than 22x prospective earnings.”

https://www.finsburygt.com/application/files/5517/1658/1961/Half_Year_Report.pdf