A changing market

The housing market is undergoing a major change at the present time. The days of paying estate agents a percentage of the sale price of a house may be numbered, with many companies now offering low-cost fees in return for an online-focused presence. This means they offer a similar amount of online exposure to potential buyers as traditional estate agencies, as well as a local property expert to guide the seller through the process.

The popularity of such services is growing, with Purplebricks being one of the leading operators in this area. As online-focused estate agency services gradually become more mainstream, the company could experience a tailwind due in part to its dominant position within the industry. This may act as a catalyst on its financial performance and share price over a multi-year period.

Growing market

While house prices have fallen marginally in value this year, their outlook in the long run remains relatively positive. High demand plus a limited supply of new houses means there is likely to be a supply/demand imbalance for some time to come. This should mean that the average time it takes to sell a house remains somewhat limited. This could persuade more sellers that they do not require a traditional estate agency service, but rather can take a risk by using a cheaper alternative such as Purplebricks.

Certainly, Purplebricks may not be a cheap stock to buy at the present time. For example, it has a forward price-to-earnings (P/E) ratio of 223. But with significant growth potential, it could gradually begin to justify its valuation in the long run.

A further opportunity

Also offering upside potential within the property sector is Belvoir Lettings (LSE: BLV). The UK’s largest property franchise reported on Thursday that it has acquired Brook Financial Services for a total consideration of £2m. Of the amount, £1.5m will be paid in cash, while the remaining £0.5m will be paid for in new shares in the company. The acquisition is expected to be immediately earnings accretive and could help to better position the company within the mortgage marketplace.

Looking ahead, Belvoir is expected to deliver earnings growth of 18% this year and a further 10% next year. This puts its shares on a price-to-earnings growth (PEG) ratio of just 1.1, which suggests they could offer capital growth potential. With trading in line with expectations and a sound strategy despite a management reshuffle, now could be the right time to buy a slice of the business.

The post Why I’d buy and hold long-term growth stock Purplebricks Group plc forever appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Clearly, this is good news for the company and investors have reacted positively to the update. Today’s share price rise takes Independent Oil & Gas’ capital gains since the turn of the year to 27%, with at least some of those gains being due to a higher oil price.

Looking ahead, there is further potential for gains if the oil price rises, although the supply/demand imbalance which has been present in recent years looks set to persist in the short term at least. Therefore, buying smaller exploration plays remains relatively high risk, although Independent Oil & Gas may be of interest to long term, less risk averse investors.

Also rising today are shares in Belvoir Lettings (LSE: BLV), with the property specialist announcing the acquisition of Northwood GB Limited for a total consideration of up to £22m. With Northwood being the largest remaining independent UK lettings franchise which operates 86 outlets nationwide, Belvoir will be the largest property franchise group in the UK upon completion of the deal.

To fund the acquisition, Belvoir is conducting a placing to raise gross proceeds of up to £2.5m. The deal appears to be a logical one for Belvoir and fits in with its multi-brand strategy to grow both organically and through acquisitions.

With Belvoir forecast to increase its bottom line by 12% this year and 9% next year, it appears to be performing well even without the acquisition of Northwood. And with greater diversity and increased resilience during what could prove to be a relatively challenging period for the UK property sector, buying Belvoir now seems to be a sound move for long term, less risk averse investors.

Meanwhile, investment specialist Tern (LSE: TERN) has also been engaging in M&A activity of late, with it announcing the purchase of Flexiant Limited last month. It is a provider of cloud management software for cloud orchestration for on-demand, fully automated provisioning of cloud services. The deal has been paid for through the issue of 8m new ordinary shares in Tern and with its shares rising by 13% in the last month, investor sentiment in the business seems to be improving.

Clearly, the cloud and internet of things spaces have considerable long term appeal and could allow Tern to deliver rising profitability over the coming years. However, with it being a loss-making entity last year and there being other options within that space, it may be prudent to await further news flow and improved financial performance before piling in.

The post 3 unmissable small-caps? Independent Oil & Gas plc, Tern plc and Belvoir Lettings plc appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.