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A powerful brand at a decade-low price

Shares in this once-commanding company have struggled as interest rates have risen. But unpopularity is not the same as terminal decline
January 18, 2024

Few companies have benefited from the age of low interest rates more than funds supermarket Hargreaves Lansdown (HL.). It achieved 10-bagger status in just a decade between 2009 and 2019, and has proved a favourite destination for savers looking to generate alternative forms of income from equities and funds. The fact that cash was losing value in real terms year on year was a major incentive for many new investors to enter the market for the first time.

IC TIP: Buy
Tip style
Value
Risk rating
High
Timescale
Medium Term
Bull points
  • Entrenched market position
  • Loyal customer base
  • Demographic shift ushering in new investors
  • Low share valuation
Bear points
  • Scrutiny from regulator
  • High costs
  • Threat from competitors

That said, higher interest rates haven't proved too painful either. Hargreaves Lansdown just enjoyed the most profitable year in its history thanks to higher interest rates generating record income on the cash and client deposits it holds.

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