I was wondering why this has ticked up this morning. Geoff Wilson has given it a good mention at a conference this morning.
Stock: Armidale Investment Corporation
Investor: Geoff Wilson, Wilson Asset Management
Mr Wilson picked a small cap financial services company, a stock which he believes could be ahead 50 per cent within 12 months.
Armidale is an asset finance broker which Wilson says is a $42 billion industry.
"It's growing at 10 per cent plus per annum. These guys have made some recent acquisitions and they will benefit as the industry consolidates."
The stock meets Mr Wilson's criteria to find well run companies with good earnings growth, which is the main driver of share price performance.
Earnings per share are expected to grow at 25 per cent-plus each year over the next two years and will lower the price to earnings ratio to under 10 times.
"It's an investment company moving to an operation company so the market will revalue it," he says.
The asset finance brokerage industry is similar to the mortgage brokerage industry which has grown substantially over the last 10 years.
"I believe the share price will be 50 per cent higher but from an investment perspective it's [a] five-to-10 year view."
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