Not only a leading law firm in dispute resolution, this group boasts market leading margins, testament to the pricing power of its rainmakers who have an enviable success rate in winning legal cases. The group has also diversified its revenue streams, having purchased a highly profitable corporate finance boutique, with a bumper pipeline, last autumn.
Add to that potential for shareholders to reap chunky cash returns from the small portfolio of litigation investments, and a rating less than half that of its larger rivals, and the shares offer considerable upside trading on a forward price/earnings (PE) ratio of 7.5.
The group’s growing diversified revenue stream offers scope to generate strong earnings growth in the coming years and reward shareholders with a high payout ratio. For good measure, its businesses have performed well through the UK lockdown, and are ideally placed to benefit from the fall-out. For instance, the law firm has received new instructions from clients in the areas of financial restructuring and employment related issues.Download PDF