THE ONE THAT GOT AWAY

Finweek English Edition - - SIMON SAYS -

Some­times a stock gets away from you, and Fin­Bond is just such a stock. Just over a year ago I was con­cerned about the growth go­ing for­ward. The com­pany op­er­ates in very short-term, small un­se­cured loan space and I felt that mar­ket was sat­u­rated with lit­tle real growth prospects. Fur­ther, any move into longer terms would hurt Fin­Bond as short-term loans, which is a big earner for the com­pany, means that it turns over its loan book al­most four times a year. This gen­er­ates se­ri­ous cash f lows. But it has grown and still op­er­ates in the short-term loan space with the av­er­age du­ra­tion be­ing 3.6 months. That all said, the share price rush to 500c puts the stock on a de­mand­ing 58 times P/E, but so far it is jus­ti­fy­ing that rat­ing.

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