August 2018


Stock I'm watching this month:-

 IVC - Invocare Limited

Sector: Consumer Cyclical
Market Cap: 1.6 Billion
Price/Earnings: 16.3
Price/Book: 5.6
Return On Equity: 37.9%
Return On Assets: 8.6%
Debt/Equity: 86.78%

Reasons to watch: There's only 2 things that are sure in life - Death and Taxes. Sounds a bit morbid, but a business dealing with death is surely defensive and built to last. Invocare Limited which is one of the largest funeral, cemetery and crematorium operator in Australia, New Zealand and Singapore is well positioned to service this morbid industry. According to Invocare's forecast, death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050. The valuation of the company seems reasonable at first glance except for the high Price/Book and Debt/Equity. Also, the Fair Value based on a quick Discounted Cash Flow shows that it s over valued at this point in time.

Sentiment: Hold
Disclosure: Not Held
My Strike Price: $5 (Discounted Cash Flow Intrinsic Value: $5)

Disclaimer: This does not constitute any financial advice or stock recommendations. As always, Do Your Own Research.


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