Have Watchstone finally turned the corner?

On the 22nd December the share price briefly hit £3. It now appears the company is being treated like any ordinary business and the baggage from the past is no longer holding back the business.

Looking at what’s happening in the personal injury business, Watchstone have done well selling the business to Slater and Gordon, returning £414m to shareholders.

The new BOD have started to refocus the business and it is clear reading the recent brokers note from Peel Hunt the business is well placed to benefit from the  expanding Usage Based Insurance and also the healthcare market.

The business has £145m in the bank (£90m + £55m in escrow) so no need for any share dilution to finance the strategy when announced.

We have the following events that will potentially permanently push the share price above £3:

  1. Hubio being launched in January pulling together insurance related technology parts of the business.
  2. The growth strategy for pt Health announced.
  3. Strategy for dealing with non core activities.
  4.  Private investors wishing to reinvest their capital return after the 31st December.
  5. Historic investigations and litigation issues run their course.
  6. More Directors share purchases.

 

It is easy to see why Peel Hunt have a mid case valuation of 494p per share.

With Directors, institutional and private investors buying it is clear the share price will continue to rise.

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