The float of an exciting new company can ignite investor interest in the shares of already-listed peers. This certainly seems to have been the case for MoneySupermarket.com (MONY), which has seen its shares run up 16 per cent since the IPO of fellow price comparison website Gocompare.com (GOCO) at the end of 2016. We think the shares should also be buoyed by Comparethemarket.com owner BGL joining the market later this year. And, before then, there is the prospect of a share price fillip based on the growing likelihood that the cash-generative company will declare a special dividend.
- Likelihood of a special dividend
- Excellent cash generation
- Demand for price comparison websites is rising
- Growing listed price comparison peer group
- Big marketing expenditure
- Market turbulence could cause difficulties
BGL has been twiddling its thumbs about its float since the start of 2016 and has recently pushed back its listing date to the second half of this year. Perhaps the current murmurs of economic turbulence in the UK remind it of the time that Moneysupermarket became a public company in 2007, soon after which trading turned down, taking the shares with it.