Continues to Grow. But Is Now the Time to Buy?


It’s got a market cap of a measly $13.39 million.

Yet, this company is drawing in mass attention from Aussie renters.

Which means if you own property…well, this could be an online hotspot where you find your next tenant. And fast!

But as an investor, is this a company even worth your time? Should you even bother placing Ltd [ASX:RNT] on your watchlist?

Well, one of our readers thinks so. But before you do. You’ve got to be aware of a few things…

First, let’s cover a few of the basics…

Who is Ltd [ASX:RNT]

As you just read above — who I’ll refer to as RNT — has a market cap of $13.39 million.

That means it’s tiny in size and wouldn’t normally be worth your time.

The company operates a real estate website. It focuses on the rental market.

It covers all aspects of the rental market with services for renters, agents and landlords.

In the company’s 30 June 2019 annual update, it has accumulated losses of $40 million. It was only generating a revenue of $2.4 million.

The company was founded in June 2015.

And today, it has more than 700,000 renters ‘resumes’ on file. With 700 being created every day in 2019.

From a business perspective…RNT does not charge renters to use its platform.

Instead, revenue is generated as renters, landlords and agents use add-on services.

Users of the platform can use services like RentCheck, RentBond and RentConnect.

Anyway, that’s just a bit of a background on the company. There’s something more important you should be looking at.

So, let’s find out!

There’s a reason why you don’t buy falling shares

When it comes to investing in a company, there are a few key rules to follow.

Firstly, you want to make sure the company is profitable. Secondly, you want to make sure that profitability and revenue will continue to increase over time.

For new companies, it can be hard for them to make revenue at the start.

So, it’s no surprise that RNT has accumulated a stack of debt.

This is something you should be aware of, as it may lead to a capital raising in the future.

That’s where the company looks to raise cash to continue to fund the project. And pay down unnecessary debts. When this happens, your shareholding in the company is diluted as more shares hit the market.

It’s not for certain, but it’s something to be aware of.

Secondly…you should look at the stock chart. Any clear down-trending chart should be avoided.

That’s a general rule of thumb anyway.

I’ve attached the chart for you below.

Port Phillip Publishing

[Click to open in a new window]

As you can see, the company chart has been moving down. It peaked way back in 2015.

Again, this is just a general rule of thumb.

For me to get interested in this company, I’d be looking for the chart to begin to move higher.

Right now, I think that this is just one for the watchlist.

For best results, continue to watch companies that are in the top 200.

As always, this is not a recommendation to buy or sell RNT. It is an update only. I hope you found it useful.

** Our publication Profit Watch is a fantastic place to start your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here. **