The Perfect storm has arrived and the share price is starting to be re-rated and is on the beginning of the journey to deliver significant returns for longterm investors.
Ingredients for the Perfect Storm
Reasons why the Perfect Storm has arrived.
1. Ever improving cash position.
The market is becoming more and more convinced as we reach year-end that cash isn’t an issue.
2. Current market expectations do not take into account the following.
a) NIHL cases settled earlier than the anticipated 18 months. NIHL cases have been settled at higher fees than anticipated. The impact of this will not be known until Quindell have completed their review.
b) Revenue from recent contract wins not factored into KPIs. The Aviva contract for example will generate significant revenue.
3. Short Positions
These are being reviewed in light of recent revelations and those short are starting to close their positions.
4. Board of Directors
The BOD is in the process of being strengthened with members who are respected by the city. The emphasis is on governance and city credibility.
Their activity has significantly reduced, indicating either they now realise they have nothing credible to attack Quindell with or they are no longer getting paid to spread rumour about the business.
It is becoming increasingly apparent that a strategy is in place to deliver exceptional returns to shareholders and the market now understands what Quindell have to offer with regard to growth and profits.
Sooner rather than later the value of the company will be reflected in the share price. The roller coaster ride will now be prominently up with a few dips while shorters manage their exit and short-term traders take their profits.