“Xero’s dominant accounting product essentially became the plumbing of small enterprises, producing high barriers to entry, sticky switching costs and strong pricing power,” Tynan says.
“To me, REA fits the bill. It’s an oligopoly, it’s unlikely there will ever be a third player, and every single result we look at, it’s pulling away from Domain. Finally, in the next decade the government wants to build 1 million homes for millions more immigrants, so we like the outlook.”Ben McGarry, Totus Capital founder and portfolio manager, likes Nasdaq-listed trading platform and futures exchange CME Group.“Founded in 1898, CME fits that bill.
“We see long-duration growth ahead as a double-digit earnings per share grower for years to come and a high returning, low capital intensity business model outsourcing all manufacturing, along with a solid net-cash balance sheet. The recent share price weakness, driven by a short-term inventory glut in the channel, presents a good entry price in our view.