MIDAS SHARE TIPS UPDATE: Turning point for debt and claims management group Fairpoint
Fairpoint Group was recommended by Midas in September 2013, when the shares were 124½p. Today, the stock is 125p.
The performance of Fairpoint Group is clearly disappointing but should take a distinct turn for the better, as the company has been through a transformation over the past year, the fruits of which should become apparent in 2015 and beyond.
Fairpoint used to be a one-trick pony – its trick being individual voluntary arrangements (IVAs), a form of consumer bankruptcy which became popular under the Labour government.
Fairpoint chief executive Chris Moat expanded the group into debt management and claims management
The sector has become more subdued since interest rates hit record lows and US banks stopped offering credit cards to people with little or no spare cash.
With this in mind, Fairpoint chief executive Chris Moat expanded the group into debt management and claims management and last year bought legal firm Simpson Millar, a deal which dramatically alters the group’s focus and prospects.
The consumer legal market – family law, wills, conveyancing and personal injury – is worth £10billion and around 10,000 firms are involved in it.
Moat’s plan is to buy a number of these and become a top-five player in the consumer legal market in the next three years. He also intends to bring down costs by using less expensive staff to do the more administrative work.
The company last week unveiled a 15 per cent increase in profits to £9.3 million, including a strong maiden contribution from Simpson Millar. The dividend rose 7 per cent to 6.4p and brokers expect good growth this year and next.
Midas verdict: Fairpoint’s share price should pick up, so existing investors should hold. New investors could also find value at current levels.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Mini Cooper SE: The British icon gets an all-electric makeover
- How to invest for income and growth: SAINTS' James Dow
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini celebrates the release of brand new all-electric car Mini Aceman
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Blue Whale fund manager on the best of the Magnificent 7
- Mercedes has finally unveiled its new electric G-Class
- Don't try to be a super woman - build a dream team! The...
- The plant that can add £10,000 to the value of your home...
- Reckitt Benckiser under the cosh over baby formula, says...
- Stock market given a shot in the arm as Raspberry Pi and...
- BUSINESS LIVE: Nadhim Zahawi to chair The Very Group;...
- Recruitment in private sector falls for tenth month in a row
- Business leaders call for flagship scheme to get young...
- Helium and hydrogen company set to join stock market in...
- Britain's nascent battery industry receives shot in the...
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- Where is Labour's 'white heat' revolution to revive...
- FTSE 100 hits an all-time high - but remember the stock...
- British businesses awash with 'accidental' bosses who...
- Shipping broker Clarksons on list of shame after...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- Virgin Money's biggest independent investor...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...