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Monday, 18 Mar 2019
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BUY HOLD SELL - ISU

iSelect (ISU) has been beaten up over the past 12 months. The stock fell from around 110c to circa 35c in April last year and has been trading sideways for the best part of the last six months, around 70-75c. 

The big wipe-out was due to an earnings downgrade, with the company dropping its guidance from $26m-$28m, to $8-$12m. The company ran into trouble with its business model, which sees it only earn a commission if a customer buys a product, policy or plan. Amid increasing competition, a tough insurance market, and consumers’ willingness to compare plans themselves, revenue missed expectations by a mile. Strategy execution was also a problem, particularly with regard to marketing. Reduced search engine marketing saw fewer people clicking through

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