Asian property website operator iProperty Group Ltd (ASX: IPP) is on track to mark its third day of gains with management unveiling an acquisition of a leading Thai property portal this morning.
The news bolstered the stock by a further 1.6% to $3.28 this morning, taking its gain for the week to 13.9%.
I believe iProperty is heading higher and could reach $3.50 over the short term as management has given investors a few things to cheer about.
Today's acquisition of Prakard.com will give the group a much firmer hold on the online property market in Thailand as the independent site attracts around 500,000-600,000 unique visitors every month from organic sources (meaning traffic doesn't come from third party sites).
That's pretty impressive and explains why the site is profitable.
iProperty will pay around Baht 71 million, or $2.7 million, for the site and the transaction will be funded from internal reserves.
iProperty already owns Thai portal ThinkOfLiving.com, which focuses on property developers. On the other hand, Prakard.com targets private listings and the property agent market.
There are 180,000 property sales a year in the greater Bangkok region and that is significantly more than either Melbourne or Sydney.
This isn't the only piece of recent good news. iProperty announced a record quarterly result yesterday with cash flow increasing by two thirds in the three months to September when compared to the same time last year.
The share price reaction shows that the recent sell-off in other internet-based disruptors may be overdone. Jobs website owner SEEK Limited (ASX: SEK) is one stock that was heavily sold off as management sacrificed near-term earnings to invest in long-term growth.
SEEK is trading close to a 20-month low as the stock crashed close to 30% since the start of the calendar year and I think the stock looks attractive for investors with a longer-term investment horizon.
Leading Australian property website REA Group Limited (ASX: REA) may not have underperformed to the same degree but the stock has also been under pressure in the past few months and is down by 1.3% since January.
Investors are worried that REA Group won't be able to sustain its impressive growth momentum due to growing competition from the likes of Domain.com.au, which is owned by Fairfax Media Limited (ASX: FXJ).
REA owns more than 20% of iProperty and there's speculation it could make a takeover bid for its smaller peer.
The uncertain macro-economic environment could continue to give equity markets further whiplash but any sell-off among leading internet stocks should be seen as a buying opportunity as I believe the sector has further room to run over the next few years.
