Did I miss the boat with this FTSE company?

I’m all the time looking out for hidden gems within the FTSE. Not too long ago, my consideration has been drawn to IntegraFin (LSE:IHP), an organization that’s been making waves within the monetary providers sector.

With the shares hovering by practically 50% up to now yr, I can’t assist however surprise, have I missed the boat on this FTSE firm?

An ideal yr

IntegraFin, which offers an funding platform for UK monetary advisers and their purchasers, has definitely had a very good yr. Not solely has its 46.9% return comfortably outperformed the broader UK market during the last yr, nevertheless it’s additionally left its Capital Markets trade friends within the mud, with the sector averaging a 16.3% return.

This stellar efficiency could have gone underneath the radar for a lot of. The corporate’s been persistently rising its earnings at a mean annual price of three.5% and boasts a formidable return on fairness of 27.4%. With web margins of 37.7%, the agency’s clearly doing one thing proper in a aggressive trade.

The basics

Digging deeper into the financials, there’s quite a bit to love right here. The corporate sports activities a rock-solid stability sheet with zero debt, giving it vital monetary flexibility in a interval of excessive rates of interest and basic uncertainty. Its newest reported earnings confirmed EPS of £0.074 for the primary half of 2024, up from £0.067 in the identical interval final yr.

Furthermore, IntegraFin’s income has been rising at a mean price of 8% a yr, outpacing its earnings progress. This might recommend that the corporate’s investing closely in progress, which I just like the sound of.

Am I too late?

With such a powerful efficiency, it’s pure to surprise if the perfect good points are already behind us. Nevertheless, there are a number of components that recommend IntegraFin may nonetheless have room to run.

Regardless of the current worth surge, the shares are buying and selling at a price-to-earnings ratio (P/E ratio) of 21.9 occasions, which isn’t excessively excessive for a corporation with its progress profile and market place.

Analysts forecast earnings to develop by 8.78% a yr, indicating continued optimism concerning the firm’s prospects. IntegraFin provides a good 2.9% dividend yield, which is effectively coated by earnings with a 65% payout ratio. This means room for dividend progress.

As an funding platform supplier, IntegraFin is effectively positioned to profit from the rising development of digitisation in monetary providers.

Dangers

In fact, no funding is with out dangers. The enterprise operates in a really aggressive trade, and its success has seemingly attracted the eye of bigger gamers.

Latest regulatory adjustments within the monetary providers trade might additionally severely influence the enterprise mannequin, and any financial downturn might have an effect on the demand for funding providers.

To me although, the massive concern is that the shares are already overvalued. A Discounted Money Circulate (DCF) suggests the present worth is about 6% above honest worth. Clearly, this isn’t a assure, nevertheless it doesn’t encourage me that there’s enormous potential, regardless of what some analysts are forecasting.

I’m staying away

So have I missed the boat on IntegraFin? Maybe not solely. This FTSE firm appears to have the wind in its sails and, for traders prepared to climate potential storms, it’d nonetheless supply an attention-grabbing voyage.

Nevertheless, I feel there are in all probability extra profitable investments on the market, with much less threat. I’ll be steering clear for now.