The proliferation of price comparison websites in the UK highlights the competitive nature of this area. The major websites include Comparethemarket.com, uSwitch.com, Moneysupermarket.Com (LON:MONY), Gocompare.Com (LON:GOCO) and Confused.com. All of these sites are owned by listed businesses with the exception of Comparethemarket.com which may float this year.

Moneysupermarket.Com (LON:MONY) recently appointed a new CEO and he has stepped up capex in order to allow the group to shift towards mobile devices. Growth and profit forecasts were also downgraded for the current year.

The share price reaction has been severe with the stock now at about 260p. On face value this looks like a reasonable value opportunity but I'd welcome any thoughts. The shares will pay about at least 18p dividends over the next 13 months (final for 2017 and payments for 2018).  I am conservatively assuming that 2018's dividend is unchanged on 2017.

After these payments the ex-dividend price would be 242p a share. Earnings per share for 2019 are forecast at 19.4p and so in about a year's time the forecast P/E will be 12.5X - obviously provided the EPS forecasts for 2019 don't change.  

The group will also continue to build up its net cash position over that time given that no share buy backs were announced for 2018.  A £40m buyback in 2017 reduced the share count by 2% and net cash at the end of 2017 was £35.1m.

Clearly there could be further upsets here with Moneysupermarket.Com (LON:MONY) appearing to lose market share. However, this could also be a typical new CEO first update: i.e. shock everyone in an attempt to paint a good picture after taking charge.

The broad thesis is that unless something else goes wrong with the business a share price of about 260p shouldn't result in much downside. Something else, of course, could go wrong. The price comparison sector is somewhat volatile and predictable.  Consumers tend to switch when prices increase, for example.

I don't have a particularly strong view here because this area is just inherently unpredictable to some extent in terms of consumer switching and the competitive dynamics.   However, I think accumulating MONY around these levels may be attractive while leaving fire power to buy again…

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