Integrafin Holdings (LON:IHP)
Was just doing a bit of research and noticed the z score is flagging risk of serious financial distress within next 2 years , but stock report shows net cash, a company making profits and forecast to raise dividend in future years and free cash flow per share is trending up.
Anyone more experienced with a view on what I'm missing as looks a decent stock to me.
Thanks
Andy
Hi Andy
You ask about the poor Z-score of £IHP.
I am not sure that the Z-Score or the James Montier cooking the books short screen (also showing a red flag are relevant to £IHP. Both are designed to pick up issues for companies that sell things - i.e. revenue is based on the value of products sold. Integrafin Holdings (LON:IHP) runs a platform that manages the investments wealth managers make on behalf of their clients and charges fees as a %age of the assets under direction (the assets held and invested on behalf of those wealth managers). As a result, total revenue is not a relevant figure upon which to base any analysis. If you look at the stock report is easily 40%+ of total revenues, which makes sense for this business but would be extraordinary for a manufacturing or retail business.
So, my thought is that these screens are not relevant to Integrafin Holdings (LON:IHP) and should show as n/a instead of giving a false reading. But then I am not a gospel on this. Please check with other sources. For what it is worth I am long Integrafin Holdings (LON:IHP) and very pleased with today's funds under direction update
