International Personal Finance share price rockets 11%! Should I buy in?

The International Personal Finance share price has soared within a whisker of new 14-month highs today. Is now the time for me to buy?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The International Personal Finance (LSE: IPF) share price has torn higher in Tuesday business. At 140.6p per share, the small-cap is up 11% from Monday’s close.

IPF’s share price has exploded after the doorstep lender upgraded its forecasts for the full year. The company has leapt an impressive 130% in value during the past 12 months.

Another excellent trading update

Today, International Personal Finance said trading has remained positive since the release of first-quarter numbers on 29 April. The amount of credit issued by the business is broadly in line with its expectations, it added. This comes despite the tightening of Covid-19 restrictions in a number of its markets.

IPF had been anticipating its collections performance to weaken during the first half of 2021 as further waves of coronavirus infections swept in. However, the company said “our actual collections performance has continued to be very strong” in recent months. As a consequence, it’s enjoyed a faster-than-anticipated improvement in impairment as a percentage of revenue.

Expectations upgraded again

The company also said that while it remains cautious in light of the ongoing public health emergency, “the faster-than-anticipated improvement in impairment in April and May is expected to result in a further improvement in the full-year impairment charge.”

The UK financial share also reckons it’ll enjoy a “significantly stronger rebound in profitability” in 2021 than it had predicted in April.

Back then, IPF had predicted “a stronger rebound in profitability” for the full year, thanks to a lower-projected bad loans charge in 2021. It had also celebrated strong collections helping it to reduce impairment costs as a percentage of revenue by 5.2%, to 32.2%. Finally, IPF also saw the amount of credit it had issued improve markedly in the first quarter. This was down 18% year-on-year, much better than the 31% drop reported in the final quarter of 2020.

Should I buy International Personal Finance?

IPF is clearly on a roll, then. And as a long-term UK share investor, there’s a lot to like about the financial giant. I like its focus on emerging markets in Eastern Europe and Latin America, regions where rapid wealth growth is supercharging demand for financial products.

I also like the work IPF is undertaking to embrace the fast-growing digital end of the market. For example, 2020 saw the rollout of its new mobile wallet in Latvia, as well as the launch of digital operations in the Czech Republic.

That said, there are a few things stopping me from buying IPF shares for my own portfolio today. The threat to its recovery posed by the rolling Covid-19 crisis is one. But a longer-term concern to me is the rising threat that doorstep lenders in particular face from regulators.

And I don’t think these threats are baked into the firms valuation at current prices. I’d much rather buy other UK shares today.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

10 Warren Buffett ideas every investor should remember

Christopher Ruane shares 10 simple but powerful lessons from the career of billionaire stock picker Warren Buffett that he applies…

Read more »

Tesla building with tesla logo and two teslas in front
Investing Articles

£10,000 invested in Tesla stock when Elon Musk endorsed Donald Trump is now worth…

Elon Musk's alliance with President Trump has split opinion among investors in Tesla stock after a rollercoaster ride for the…

Read more »

Thoughtful man using his phone while riding on a train and looking through the window
Investing Articles

This S&P 500 stock looks crazily cheap and has a 5% dividend yield

After a roller-coaster start to 2025, the S&P 500 is just 5% short of its record high. Meanwhile, this lowly…

Read more »

piggy bank, searching with binoculars
Investing Articles

At 6.2x forward earnings, this FTSE income stock could make investors very happy

This retailer makes the vast majority of its sales in physical stores and its earnings reports make no mention of…

Read more »

A graph made of neon tubes in a room
Investing Articles

Up 250 times since 2015, but are Nvidia shares ‘cheap’?

Nvidia shares have rocketed for years, but on one metric at least, the stock might still be attractively priced, according…

Read more »

Illustration of flames over a black background
Investing Articles

Up 25% in a year plus an 8.5% yield – this ultra-high income stock is on fire!

When Harvey Jones bought shares in FTSE 100 income stock Phoenix Group Holdings he was mostly chasing its ultra-high yield.…

Read more »

Artillery rocket system aimed to the sky and soldiers at sunset.
Investing Articles

£10,000 investing in the top FTSE 100 growth stocks last year is now worth…

The FTSE 100's climbing ever closer to a new record high but the top stocks aren't necessarily the best buys.…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Why this top consumer stock is one for passive income investors to consider

The Coca-Cola HBC share price has been climbing higher in 2025. But is it still flying under the radar as…

Read more »