View of Quindell Legal Services compared with its peers
Assuming QPP reports profits close to £300M then QPP’s current share price indicates QPP earnings are valued at 2 times earnings.
This compares with the following valuations for its peer group:
a) Slater and Gordon valued at 17 times earnings.
b) Redde valued at 16 times earnings.
When the PwC report gives QPP a clean bill of health and the end of year trading statement is in line with expectations the QPP share price will be drawn towards valuations closer to its peer group.
Share price of QPP when sentiment returns and it is treated like other similar companies should have a value which is significantly ahead of today’s share price of c£1.
Regardless of the outcome of the Slater and Gordon deal, as other news is released and the structure of the business is better understood by the market the share price will rerate accordingly.