When deciding which UK inventory to purchase, I like to come back to my very own conclusions. I actually wouldn’t depart it to a robotic.

However, it’s at all times good to have a second opinion, even of the synthetic selection. So I requested ChatGPT to inform me which UK share it although was finest to purchase over the subsequent month. I by no means anticipated the reply could be property portal Rightmove (LSE: RMV).

The inventory has fully dropped off my radar. Which is unusual on condition that my associate spends half their days searching it!

I assumed Rightmove will need to have dropped into the FTSE 250 however no, it’s nonetheless within the FTSE 100, with a market cap of greater than £5bn. The shares have been doing properly as effectively, up 17% in 12 months, though they’re flat over 5 years. So what was ChatGPT’s reasoning?

Is that this an excellent FTSE 100 inventory?

My robotic buddy admired the corporate’s clear market-leading place, hoovering up 80% of the time patrons and tenants spend on UK property portals. Success is self-reinforcing, as property brokers and property seekers can’t ignore it, ChatGPT stated.

All the efficiency figures it plucked out have been for full-year 2023, which confused me. On checking, I found Rightmove’s 2024 preliminaries are revealed tomorrow. What are the possibilities!

Anyway, 2023 was fairly good, with income up 10% to £364.3m as clients continued to improve packages and enhance their use of digital merchandise.

Working revenue climbed 7% to £258m, whereas the board lifted the ultimate dividend 10% to five.7p per share.

ChatGPT was impressed by Rightmove’s “high profitability and efficient business model”, whereas warning that its efficiency is intently tied to the well being of the UK property market. I believe I’ve exhausted the bounds of ChatGPT’s usefulness. So, what do I believe?

For starters, I believe the shares seemed jolly expensive, buying and selling at 26 instances trailing earnings. That’s means above the FTSE 100 common of round 15 instances.

Rightmove shares are money generative however costly

The price has been pushed up by a takeover provide by REA Group, which dealer Jefferies now suspects is unlikely to materialise. I’m resistant to purchasing shares on takeover hypothesis anyway.

A lot is determined by the well being of the UK economic system and housing market. On Boxing Day, Rightmove reported document listings. If rates of interest proceed to fall and mortgages grow to be extra inexpensive, exercise might climb additional. And if Labour’s constructing increase truly occurs, that ought to assist.

Rightmove has one other benefit. It doesn’t should pour big sums into creating on-line infrastructure.

Of that £258m working revenue in 2023, the board returned £201.7m to shareholders by way of dividends and share buybacks. It was an analogous story in 2022. I’m stunned the trailing yield isn’t larger than 1.41%. Or the shares, for that matter.

Motley Idiot buying and selling guidelines imply I can’t purchase any firm for a few days after reviewing it. So my arms are tied till after tomorrow’s preliminaries, which shall be an fascinating learn. Nonetheless, I gained’t think about shopping for till all of the takeover fuss has been priced out.

ChatGPT has by no means pretended to be a inventory picker. No investor ought to depend on it. Nevertheless it has highlighted an fascinating alternative right here. Rightmove is on my radar now.