Why the REA Group Limited share price just set a record high

REA Group Limited (ASX:REA) shares are up 1,000% in 10 years.

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This afternoon shares in freight train REA Group Limited (ASX: REA) steamed to another record high of $72.75 despite the real estate advertising business releasing no news to the market. It seems a rising tide lifted a lot of industrial growth shares today with the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) climbing nearly 1% to close at a five-month high.

REA Group shares are now up 323% over the past 5 years and up around 1,000% over the past 10 years as its high return on equity, scalability, and ability to stay one-step ahead of its rivals and real estate agent clients keeps its share price on the march.

At 41x trailing earnings of $1.77 per share it's not likely to smoke out the value investors and today's buyers will be anticipating the reported price hikes it is pushing through onto real estate agents who have been lapping up a 5-year real estate bull market.

Over the long term, REA Group may remain a good bet given its plans, inter alia, to move into the giant mortgage broking market and attempts to expand overseas. For now though the share price is starting to look a little frothy.

Motley Fool contributor Tom Richardson owns shares of REA Group Limited. You can find Tom on Twitter @tommyr345 The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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