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Great Ideas update: BCA Marketplace
BCA Marketplace (BCA) 183p
Gain to date: 10.9%
Previous Shares view: Buy at 165p, 23 Dec 2015
Analysts are increasingly excited about the growth potential at BCA Marketplace (BCA). Best known to the public as the owner of the webuyanycar.com website, BCA makes most of its money from car dealers using its physical auction sites.
N+1 Singer believes the company will report 22% growth in pre-tax profit at half year results on 30 November. It forecasts 20% compound annual growth in earnings per share for the next three years and hints this figure may prove too conservative.
BCA is one of our top picks of the year. We believe it has high barriers to entry, namely it would be extremely hard for someone else to replicate its business model to the same scale
in the UK. We also like the steady flow of cars going to auction as consumers switch vehicles every three years on credit schemes.
‘Activity levels are increasing and market share gains are set to continue,’ says N+1 Singer contributing analyst Matthew McEachran.
We remain big fans and believe the forthcoming results will help remind the market about BCA’s high quality business model. Buy at 183p. (DC)