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That’s reasonable given its global growth prospects, particularly in the UK, and higher earnings visibility from its business insurance offering.” Redflex Holdings “On our forecasts, PSC trades on a PE of about 19 times earnings for the 2022 financial year. PSC’s valuation is undemanding, says Ivers.
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“PSC is well funded after its recent capital raising, and its management has skin in the game through share ownership.
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SMEs need business insurance and premium costs are expected to edge higher for the next few years. Ivers says PSC’s defensive qualities during COVID-19 appeal. There are a lot of acquisition opportunities due to generational change as older insurance brokers in the UK retire and sell their business to firms such as PSC.” It’s picking up insurance brokers that target small- and medium-size enterprises. “PSC is not competing with insurance giants.
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Ivers likes PSC’s strategy to grow overseas through small acquisitions. This division could overtake the Australian insurance operation as PSC’s core business. The British insurance operation is growing quickly through acquisitions and mergers. More than half of its gross written premiums are from Britain and the US and it wants to test Asian markets via Hong Kong. PSC Insurance Group has a lower profile but a larger global presence. Steadfast is growing its Singapore network and has expansion plans for Britain. Insurance brokers AUB Group and Steadfast Group earn most of their revenue in Australia and New Zealand.
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Insurance is a tough industry for small companies to crack globally. The market liked the appointment because Ilczynski helped drive SEEK’s global growth. Redbubble in November announced Michael Ilczynski as its incoming CEO. “We believe Redbubble is at a tipping point in its global growth profile.” “Online marketplaces are hard to build, but history shows that companies that develop a strong foothold do very well,” says Ivers. More than 90 per cent of Redbubble revenue is made offshore. Richard Ivers, portfolio manager of Prime Value Emerging Opportunities Fund. On its current earnings growth trajectory, Redbubble is on a price earnings (PE) for the 2022 financial year of about 25 times on our numbers, which is attractive given the company’s growth prospects.” Redbubble has a highly scalable global model with attractive profit margins. “Younger consumers are favouring products that are distinct to them rather than mass-produced items. Ivers says Redbubble can maintain rapid earnings growth and justify a higher valuation. Users put their favourite art on T-shirts, mugs, stationery and other items to create unique products and an e-commerce juggernaut for Redbubble. Redbubble connects over half a million artists with almost 7 million customers. Gains have continued for Redbubble this year, the share price hurtling to almost $7. Investors couldn’t get enough of the online creative marketplace last year and its shares soared fivefold.