Australian (ASX) Stock Market Forum

SGH - Slater and Gordon

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So_Cynical said:
(19th-October-2011)In today at $1.76 ~ portfolio stock #24 ~
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I got most of my $1.95 sell order filled on Tuesday but the SP never got back to $1.95 to see my order completed..oh well, so i have decided to hold on to a few extra SGH shares, trade profit was 9.62% and i received 1 FF dividend of 2.5c (3.25 gross) so overall a 11.5% result for holding 10 months...not to shabby.

With the small (parcel) average down i took in March (1.505) the average price of my remaining shares is $1.71 ~ i have posted a 12 month chart of my activity's...keen to re enter below $1.70.

Closed Trade #91

Still lots to like about investing with lawyers.
~
 

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So_Cynical said:
so overall a 11.5% result for holding 10 months...not to shabby.

With the small (parcel) average down i took in March (1.505) the average price of my remaining shares is $1.71 ~ i have posted a 12 month chart of my activity's...keen to re enter below $1.70.

Still lots to like about investing with lawyers.
~
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Well done SC! Congratulations. I'm also keen to get into SGH, except that I'm not sure if there's a problem being overexposed to legal (I'm currently in IMF and should be for a while given such a low pe). That said, I tend to enjoy legal, IT (sometimes) and biotech anyway, so maybe I should ignore the diversification factor. I just always preferred IMF to SGH anyway. Thoughts?
 
herzy said:
Well done SC! Congratulations. I'm also keen to get into SGH, except that I'm not sure if there's a problem being overexposed to legal (I'm currently in IMF and should be for a while given such a low pe). That said, I tend to enjoy legal, IT (sometimes) and biotech anyway, so maybe I should ignore the diversification factor. I just always preferred IMF to SGH anyway. Thoughts?
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IMF and SGH are 2 very different business really so i reckon there is very little diversification over lap, i own both stocks and have at times tried to buy the only other listed legal stock (IAW) as well...my portfolio is currently 23 stocks and will be limited to 25 - 26, i don't have any problem fitting in all 3 legal stocks into my long term portfolio.

I really cant see a down side to having a portfolio slightly over weight in legals, considering the MC (size) differences and the core business differences.
 
bloomberg.com said:
Diageo Plc agreed to pay more than A$1 million ($1 million) to an Australian victim of a drug that can cause birth defects, opening the way for settlement talks with more than 100 other affected people, a law firm said.
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And that law firm is Slater & Gordon.

http://www.bloomberg.com/news/2012-...ustralian-thalidomide-suit-law-firm-says.html

SGH trading above $2 today for the first time in 10 months, i suppose 1 mill x 100 or more means that SGH looks like it will be a significantly more profitable business.
 
So_Cynical said:
IMF and SGH are 2 very different business really so i reckon there is very little diversification over lap, i own both stocks and have at times tried to buy the only other listed legal stock (IAW) as well...my portfolio is currently 23 stocks and will be limited to 25 - 26, i don't have any problem fitting in all 3 legal stocks into my long term portfolio.

I really cant see a down side to having a portfolio slightly over weight in legals, considering the MC (size) differences and the core business differences.
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I agree - IAW, IMF and SGH are very different styles of business, and at the right price one could hold all three, but a brief look at IAW sufficed to conduce me to put it aside. I like the other two, and I hold SGH (bought October 2010 at $1.68).

IAW refers to itself as a legal practice aggregator, which is a red flag for me - not necessary a no-no, but a matter requiring consideration, because many aggregators have ended up in the mire. IAW seeks business in the top end of town, rather than in what I call the Joe-'n-Jane demographic. Anyhow, IAW makes no more profit than two smart lawyers with the usual support staff could make for themselves, so I am not tempted to hurl money at it.

IMF is essentially a financier – it finances large legal proceedings on a no-win-no-pay basis, but it is astute enough to make $3 out of every $1 it invests, so it is very profitable. If, for example, it obtains five results a year on average, then it would not be abnormal for this number to vary between say three and seven, and hence its profits can bounce around from year to year. Also, because the cases are large, but few in number, there is in statistical parlance too small a “population” to keep the $3-to-$1 ratio reasonably constant. A would-be investor cannot read too much into inter-yeaer profit movements. I like IMF, but I am not a shareholder.

SGH is into the Joe-'n-Jane market – personal injury is its fortè, but it is moving into the other lines of business relevant to the Joe-'n-Jane demographic – lines like conveyancing and family law. SGH has self-funded large class-actions, which gives it an overlap with IMF, but it plans not to self-fund these in future. The problem is that the WIP tends to be debited, which is standard accounting practice, but there are not enough of these cases for likelihood-of-failure provisions to average over a year, and this can occasion large write-downs if a case is lost, as happened with the VIOXX decision in YE 30/06/2012. Although SGH has acquired many legal practices in recent years, it did this to achieve footprint in geographic and line-of-business (e.g., conveyancing) catchment areas, rather than as an “aggregator” per se, and management has stated that acquisition activity will now be reduced. I think SGH has a good business model, and I am banking on management doing the things that they have said they would do – namely:

* substantially reduce the level of acquisition activity;
* focus on growing the business organically;
* focus on settling down past acquisitions and improving margins; and
* cooperate with “funders” in large VIOXX-style litigation, rather than self-funding these.

Because of its mass-market style of business, SGH should be more predictable than IMF, but IMF's low costs means that its profit swings range from good to exceptionally good – swings that may cause some investors to sell when they should not, and so create opportunities for the canny who understand the flip-flop nature of the beast.
 
Denver Investments of Colorado seem to be interested in SGH - not that I can derive anything useful from that observation. If management can change from a grow-turnover focus to a grow-EPS focus, SGH should do OK, and I am holding my late-2010 purchase at $1.68 to see if the leopard can change its spots. The business should be able to do well, but I am unsure of the motivations of SGH's management. Are they growing SGH's turnover as an ego trip, or as the basis to remunerate themselves at a higher level, or is it for the long-term benefit of shareholders?
 
Pioupiou said:
. . . We should see good signs when various reports are published for YE 30/06/2012, but it will take longer for more recent acquisitions to make their mark, especially the UK one. . .
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YE 30/6/result was poor due mainly to one-offs, particularly the writing off of $10.5 million worth of WIP clocked up to the VIOXX matter, which went sour. Anyhow, the so-called "normalised" metrics for 2012 looked better, and the 2013H1 report has reflected that level of profitability, so relative to the poor 2012H1, it looks very good. SP was $1.50 on 30/3/2012, and today, 1/3/2013, it closed at $2.65 - probably a fair-value price relative the Thomson Consensus Forecast for 2013 EPS of 23.7 cents.
 
Pioupiou said:
Well, that is at least a recent comment on SGH . . . blah, blah blah . . . Perpetual has been taking a position, and that has uplifted the stock from a slump that it has suffered for a year or more.
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PPT still buying in March 2013, and SP started looking toppy, so I bailed out on 6 and 7 of March, selling 18,000 shares at $2.65. I'll watch TTG for a possible re-entry if the SP drops below my guesstimated fair-value price. I like the basic idea of SGH - legal services churned out like sausages for the masses.
 
I don't know who is representing James Hird - But his wife Tania was a solicitor prior to them getting married.

Anyway, a daily update on the stock.

SLATEs.gif
 
Hird's solicitors are Ashurst Australia, and he has Julian Burnside QC and a junior barrister also representing him.
 
piggybank said:
I don't know who is representing James Hird - But his wife Tania was a solicitor prior to them getting married.

Anyway, a daily update on the stock.

View attachment 53998
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What a ride for SGH holders, from $1.50 to $3.50 in less than 18 months...and this is a safe conservative legal stock.

I'm up 98.6% and loving it. :D plus a gross div yield on investment of just under 5%
 
So_Cynical said:
(15th-July-2012) I got most of my $1.95 sell order filled on Tuesday but the SP never got back to $1.95 to see my order completed..oh well, so i have decided to hold on to a few extra SGH shares

With the small (parcel) average down i took in March (1.505) the average price of my remaining shares is $1.71
Click to expand...

I sold a little less than half of my remaining SGH shares today @ 3.80 ~ with hindsight it was a good thing that my sell order of 14 months ago wasn't completely filled because those extra shares made this half profit take possible, seeing that im still left with an acceptable sized position.

Very surprised that i could take a 114% profit from a safe conservative legal stock in less than 18 months. :dunno: its a hell of an up-trend.
~
 

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So_Cynical said:
I sold a little less than half of my remaining SGH shares today @ 3.80 ~ with hindsight it was a good thing that my sell order of 14 months ago wasn't completely filled because those extra shares made this half profit take possible, seeing that im still left with an acceptable sized position.

Very surprised that i could take a 114% profit from a safe conservative legal stock in less than 18 months. :dunno: its a hell of an up-trend.
~
Click to expand...

I did try to alert y'all to SGH.

A nice earner for me since the election.

https://www.aussiestockforums.com/forums/showthread.php?t=27367&p=792905#post792905

gg
 
pleased to report my lawyers SAG smashed the insurance compay XCHANGING
WHAT a pack of dog fcnk lowlifes they are tried to force me back to work
special mention to JIMMY DUFOUR my lawyer I love you bruvva assistant natsha rose
nice chick,

so you get injured you wanna win go to sag
tigerboi
 
tigerboi said:
nothing to worry about as slater/gordon are appearing for me in my workers comp case

then the common law suit v my employer...i intend to buy a large stake.so it will be about $3 after xmas...tb
Click to expand...

well it hit $3 as I said so I get my payout around September & im going to toss
in $100,000 as a really good 5-10 year investment spoke with the MD the other
day when he rang my lawyer to give him a wrap on our victory.
so I will make this prediction SGH to be $7.50 next xmas & $10 the one after
tigerboi
 

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