Re second threat from tort reform, see opinion piece "Slater &...

First 11 Last

Share
Profile

Follow
thichcafe

35 Posts.

1

03/12/15

00:25

Post #: 16534388
Share

Originally posted by showmethe$$$ ↑

I've been obsessing over SGH the past couple of days, trying to figure out why people are hesitating over buying...

There are two roadblocks I see for SGH;

1) The ASIC Investigation
- Very unlikely to impact the company. The investigation (from what I understand) is looking into how they were classifying assets on their balance sheet and should not impact profit. Management have already taken positive steps to address this (correcting accounting policies & appointing a new CFO).

2) The newly introduced cap for UK claims
- Yes, it is an unfortunate event that will impact profits and I can see how this may cause fear in relation to their increased debt load, however the company's cash flows are still strong and the overall business is definitely enough to stay afloat. (see screenshot from IBIS Research).

Of course, I understand the share price is riddled with short traders and other "bad guys" but this shouldn't prevent anyone from buying at this price?

I see fields of green once this ASIC investigation is finalised.

Please let me know if I've missed something here, any feedback is much appreciated.

Expand

Re second threat from tort reform, see opinion piece "Slater & Gordon could emerge in a stronger position"
http://www.theaustralian.com.au/bus...tronger-position/story-e6frg9uf-1227626147539
"Anyone who thinks the British version of tort reform means the end of Slater & Gordon has forgotten the lessons of history. Eventually, this could strengthen the Australian firm’s position in the British personal injury sector. ....

Australia’s tort reforms slashed the level of civil litigation by 43,000 cases in three years, which placated insurance companies that had withdrawn from the marketplace over what they considered to be a litigation explosion.
But there was a price to pay. The policy-induced reduction of capacity handed market power to the main targets of tort reform — Slaters and its great competitor, Maurice Blackburn.
This must rank as the perfect example of an unintended consequence.
After tort reform, Slaters listed, tapped outside capital, gobbled up competitors and now has a 25 per cent share of the Australian market for personal injury law...."

SGH Price at posting: $1.27 Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

Reply