Moneysupermarket.com Group plc MONY

I’m holding some for disclosure, but will be interesting to see where this goes in the next 12 months. The energy market situation has been and will continue to be a significant hit, though they’re quite a diverse business and there are avenues for growth in other areas they operate in (car insurance, travel insurance and financial products for instance).

Long term I’m confident in them, good margins despite a strong headwind, should bounce back strongly with a tailwind. The question for me is whether they can/will sustain their dividend next year, which I’ll be looking at very early in the new year. It won’t affect what I’ll do, I intend to buy more in Q1 2022 barring something not currently foreseeable, but will affect whether I do so early or late in the quarter. If it’s late in the quarter that money will go into other stocks (so I’m not sacrificing trying to time the market for time in the market).

I do like moneysupermarket, it has no debt, good forecasts (minus the energy crisis), however, its dividend yield at 5.17% is not well covered by earnings.

Long term I don’t think that’s a problem as gross profit margin is extremely high. The only catch is that to maintain their status as a dividend aristocrat, cover would go to ridiculously low levels in 2022, which might necessitate short term debt should there be growth opportunities they want to exploit (or, cutting their dividend, which would end their status as an aristocrat).

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Anyone know why this has gone up so much?

Its probably returned to more normality following the drop when the energy crisis hit and comparison sites weren’t offering deals.

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10% from the low isn’t anything to get too excited about (for any stock). Upper end of market noise. Price has been pretty reliably in the £2 to £2.20 range since it became clear that the energy comparison market will be non-functional for a while, and barring the odd swing here or there I wouldn’t expect this to change much until we get an idea on whether the dividend will be maintained at present levels.

The analyst forecasts seem reasonable. They acknowledge that revenue will fall in the current financial year, but to me make the assumption that 12 months from now, the travel, insurance and energy sectors will return to a functional state through which MONY will capitalize. That’s not to say they’ll return to their pre-pandemic state, but travel will grow from 2020 and 2021 levels, and there’s pessimism about insurance right now to which I’m sure MONY will adapt.

While I have no crystal ball on energy prices - they could rise substantially, even beyond the April price cap rise. Or they could fall. There are so many variables. What I do know is that a situation where energy companies are competing to avoid customers is not a state that’s tenable for the government for any lengthy period, therefore at some point in 2022 government policy will ensure that there’s an incentive for energy companies to compete for custom. And ultimately it doesn’t matter how this is achieved, the very existence of this competition for custom represents an opportunity which MONY will be able to deliver a service around.

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Well I’m a little late to the party but they held their dividend.

Once sanity (by which I don’t mean affordability as I know that’s a pipe dream, but do mean a functioning structure) returns to consumer sectors that have been disrupted of late, the services of MSM and its competitors will be in pretty high demand I should imagine. And while I’ll enjoy the dividend yield in the short term, for me it’s high margin and ability to ride out unfavourable times that entice me here. The question is less whether there’s capital upside, but over what timeframe.

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Anyone know why the price has dropped so low?

Energy and cost and living crisis. One to keep an eye on and try to figure out the bottom as imo it’ll bounce back long term.

Up 5p this morning what’s going on?
Very happy I managed to buy a load of shares at 1.68 to average down

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Pretty Undervalued IMO

Definitely. During the pre covid years we were seeing valuations of 3.50 per share. The only way is up for this one

“Past performance isn’t indicative of future performance”

i.e. Just because the share price historically was higher, doesn’t mean it being low now is necessarily a good investment.

To highlight some headwinds they’re facing, a glance at their Q1 trading update and 2021 annual report - https://corporate.moneysupermarket.com/investors/results-centre

Shows/indicates the new insurance price regulations and high energy prices are affecting tariff/price switching by customers, these appear to make up the bulk of the revenue.

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@woodyblade Bravo for pointing this out. Too many newbie posts on this forum assume otherwise. Many people buying “on the dip” don’t seem to pause and try and work out why stocks go down and how long it could take (if ever) for the stock to go up to some (inflation corrected) dizzy height from the past.

p.s. Even for people who have been investing for a long time: the link is a good one to read and digest. Thanks.

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