Described as a “price comparison website”, it handled close to half of all price comparison search traffic in the UK. The business has moved on considerably since 2007, from the days when it charged financial firms a click-through commission for each potential customer.

If you hold shares now, you’re in good company: its major shareholders include BlackRock, Aviva, Standard Life Aberdeen and State Street. Its management team is full of talent including CEO Mark Lewis, whose CV includes a stint as the Managing Director of eBay UK.

Buying the advice website Money Saving Expert from Martin Lewis in June 2012 for £87m was a masterstroke. As an expert providing down-to-earth, practical advice, Mr.Lewis is highly active and respected. The unique selling point of the firm was underscored by that acquisition and its mission has remained steadfast: you visit moneysupermarket.com and its other sites (such as travelsupermarket.com) to save money or to discover best value. That money-saving ideology has continued as consumers’ budgets have become more stretched. 

The fundamentals look good, as does its positioning and future

Last week the share price reached an all-time high of 411p. It has a valuation of circa £2.17bn, but it’s not overvalued in the opinion of this Fool and, at 25.22, the price-to-earnings ratio isn’t elevated. In the last full-year report up to December 2018 the firm posted pre-tax profits of £107.1m, a steady rise since recording profits of £65.9m in 2014. Revenue has increased from £248m to £355m in the same period. The fears my fellow Fool Royston justifiably had last year have receded.

Despite intense competition from GoCompare, Moneysupermarket.com Group has held onto its market-leading position, whereas Tesco’s attempts to enter the market floundered. The firm has progressed with its “Reinvent Strategy”, saving customers £2.1bn in the accounting period up to December 2018. It has invested considerable sums optimising its sites, making saving far easier. Its stated ambition is to “take price comparison to the next stage” by offering its customers more personalised ways to save money on household bills.

Big data is big business, and with 12.9 million active customers generating £15.90 each, the upside due to the dawn of A.I. and the opportunities the firm has for personalisation and cross selling is considerable. In my opinion the firm is sitting on a goldmine of opportunity to leverage its data.

Many Fools would have preferred to buy close to the yearly low of 258p; however, you acquire shares in sectors for many reasons, not necessarily short-term price increases.

The dividend has risen by 6%, to 11.05p per share. As a financial sector stock, the firm represents a sound investment and should be a hold for some time to come, or an addition to your portfolio (an opinion echoed by my colleague Andy earlier this month). Look out for the firm posting its 2019 interim results on 18 July.

The post This FTSE 250 stock is going to be a super money-maker in my opinion appeared first on The Motley Fool UK.

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Paul Holmes has no shares in any company mentioned here. The Motley Fool UK has recommended Moneysupermarket.com and Tesco. 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.

Therefore, I am recommending buying two pension firms’ shares: Standard Life Aberdeen (LSE: SLA) and XPS Pensions Group (LSE: XPS). One firm is an industry behemoth with legacy and agency. The other is a relative upstart with a growing reputation, which made its market debut in February 2017.

If you take this two-pronged investment approach, you’re covering your bases. Firstly, you’re buying into a company that is part of the tapestry of the pension industry. Secondly, you’re buying shares in an incredibly ambitious firm whose small market capitalisation will ensure competitors might look at it closely with a view to a takeover at some stage.

An in-depth look at Standard Life Aberdeen

Standard Life Aberdeen has offices in 54 locations employing 6,000 people, managing and administer over £550bn of assets worldwide. The Standard Life brand is trusted by over 4.5 million customers. The firm is clearly recognised and trusted when UK savers and investors are looking for advice and financial products to buy.

Analysis of the firm’s latest key performance indicators for the accounting period ending December 2018 generates confidence in its ability to grow. Gross inflows rose by £75.2bn in 2018, while adjusted profits before tax came in at £650m. The company provided a healthy, yearly dividend of 21.6p.

The share price has risen from December’s 52-week low of 224p to trade at 290p at the time of writing. This is still some distance short of the 52-week high of 385p. The target price issued by a cohort of market analysts and brokers is currently 390p. Based on the current financials and recent bullish sentiment, there’s every possibility that the share price could revisit its 52-week high. Indeed, other Foolish colleagues share my view on Standard Life Aberdeen as a buy, most notably Roland and Rupert.

Despite being viewed by many as staid, safe and lacking ambition, the firm has recently taken steps to become involved with Age Partnership in the equity release market. This is a service for those aged over 55, which is predicted to experience significant growth over the coming years.

An impressive small-cap firm with a big future

XPS Pensions Group describes itself as “the largest pure pensions consultancy in the UK”. It advises over 1000 pension schemes and administer pensions for over 870,000 members. and employs 1,200 staff across 15 UK locations.

XPS Pensions Group’s latest set of figures have revealed a significant improvement. According to the 2019 interim report, revenue growth is up 113% to £52.2m and the dividend is up 10%. Adjusted operating profit is up 63% to £11.4m and business growth is up 3.3%.

The share price has enjoyed a rally over recent months, from printing a low of 132p in mid April, to trade at 159p at the time of writing. The 52-week high is 195p and brokers have set a target price of 245p. The share price is currently trading close to the 50-day moving average of 158p, just above the 200-day moving average sited at 150p. This could be technical evidence that price is ready to bounce back.

The post Why I’d buy this FTSE 100 pension firm’s shares to put in a pension appeared first on The Motley Fool UK.

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Paul Holmes holds no shares in either firm 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.

The firm, founded by serial entrepreneurs Charles Rolls and Tim Warrillow in 2004-2005, has seen its sparkle fade after creating such a buzz on the stock market. Analysts who remained bearish on the stock, decrying it as a one-trick pony that simply got lucky, felt a sense of satisfaction as the slump unfolded. However, other analysts recognised that the fundamentals and financials were strong, including my fellow Fool Kevin, back in March.

Morgan Stanley set a price target of 4,000p on 14 June, believing the shares are worth buying, as they could outperform the broader market and other equities in its sector. Royal Bank of Canada has broadcast a 3,500p target and both targets would represent significant upside growth from Friday’s close. Five major banks and brokers have an average target price of 3,500p, with three out of the five recommending Fevertree as a buy, the other two a hold.

Stripping back the bark of Fevertree

The firm is much more than simply a supplier of a famous tonic mixer. It supplies a range of Indian, elderflower, clementine and Mediterranean tonic waters. Sicilian lemonade, Madagascan cola, ginger beer and ginger ale have been added to the impressive range. The rise in the popularity of gin in all its flavours and manifestations over recent years undoubtedly increased the profile and appeal of the firm. Many tonic aficionados and water sommeliers (yes, there are such professions) rate Fevertree’s mixers as some of the best.

The firm sells into 75 countries, sold 406 million bottles and 128 million cans in 2018. According to the firm, 90% of top restaurants worldwide stock and sell the brand. It is undoubtedly a competitor and threat to the major quoted drinks firms. With a current market capitalisation of circa £2.74bn, it could represent a logical and relatively cheap acquisition. 

Since its market debut in November 2014, Fevertree has posted an impressive rise in revenue and profits: revenue up to December 2014 was £34.68, with pre-tax profit at £2.52m. Fast forward to the December 2018 report and revenue came in at £237.45, a rise of 40% on 2017, with pre-tax profit at £75.58, a rise of circa 35%. The dividend is close to 14.50p per share. Back in December 2014 its P/E ratio was 112.66, but that figure has steadily fallen to a more realistic current level of 41.20. That level has receded since January, when another fellow Fool Royston also recommended Fevertree.

The firm has borrowings of £6.08m and total liabilities of £42.22m. If you’re into basic technical analysis, when observed on a daily chart the stock is oversold, based on the relative strength indicator. The solid roots of Fevertree, its impressive set of figures and expansion ambitions, added to analyst recommendations, marks it out as a buy or hold in my opinion.

The post After becoming flat, I predict Fevertree’s share price to recover some of its lost fizz appeared first on The Motley Fool UK.

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Paul Holmes 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.

Forcing retail brokers to place financial health warnings on their sites from July onwards woke up many spread bettors to the industry’s perils. Statements such as “77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider, you should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money” aren’t the most welcoming of messages.

However, the wider industry may have discovered an equilibrium, after the ESMA and the FCA announced their rulings, as there appears to be a reduction in the haemorrhaging of client numbers. The hard core of remaining bettors who continue to use UK spread-betting firms’ services might now fall into two distinct groups: customers who consider themselves to be more professional, or those who are more financially savvy and have the financial wherewithal to commit themselves (longer term) to the industry and markets.

Earlier this month, CMC Markets (LSE: CMCX) published its FY 2019 results. These are the first set of figures after the ESMA rulings came into effect, which forced brokers to offer certain guarantees to clients and limit the levels of leverage on offer. CMC’s operating income was £130.8m, while the net profit came in at £6.3m. In a direct comparison to previous years, the slump is apparent – in 2018 the income was £187.1m and for 2017 £160.8m.

Looking further into the CMC data, it appears the firm has lost circa 10% of its active clients in the latest financial year, down to 53,308. Its profit per client is also down, to £2,068. Based on the new ESMA/FCA framework, which immediately excluded many customers from being able to trade through CMC’s platform, this loss could be considered small. The number of trades executed through its platform is only down 6%, whilst the value of these trades are down 13%.

The CMC share price has peaked at 207p during the past 52 weeks, whilst the low has been 74.30p. Priced at 88p at the time of writing, the shares are down circa 70% from their peak of 290.5p in July 2016 and are approximately 60% less than their 240p listing price in 2016. These shares may have plenty of upside and little prospect of downside, I believe, now that the impact of tighter regulation has been absorbed.

Despite the impact of the authorities’ restrictions, CMC hasn’t been cowed;  it has continued to expand into other areas. The firm expects its German subsidiary to become fully operational by October 2019, pending final regulatory approval. Bearing in mind the stronger regulations in place in Germany, this could give an indication of how compliant CMC has become to ensure its business operates throughout Europe, precisely in accordance with the revised parameters. The firm has also white-labelled its service for the Australia and New Zealand Banking Group.

The firm has streamlined costs and ploughed significant sums into platform development over recent years, therefore its overheads and one-off capital costs could be regarded as under control. It must also be noted that when the Swiss franc suddenly spiked up 30% in January 2015, causing several brokers to collapse, CMC calmly weathered its positions, an indication that its systems were and still are robust.   

The post Why I think this small-cap stock could be undervalued appeared first on The Motley Fool UK.

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Paul Holmes 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.